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Author: 


Eldridge,  Francis  Reed 


Title: 


Trading  with  Asia 


Place: 


New  York 

Date: 

1921 


MASTER    NEGATIVE    « 


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Business 

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Eldridge,  Frank  R  jr. 

Trading  with  Asia,  by  Frank  R.  Eldridgo,  jr.  ...    New 
York,  London,  D.  Appleton  and  company,  1921. 

xxii  p.,  1  1.,  474  p.    fold.  map.    21*=™. 

Maps   on    lining- papers. 
Bibliography  at  the  end  of  each  part. 


1.  JJ.  S— Comm.— East  (Far  East)    2.4Bk  (Far  East)— Comm.— U.  S. 
3.  East  (Far  East)— Econ.  condit.       i.  Title.     *" 


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TRADING  WITH  ASIA 


TRADING  WITH  ASIA 


BY 

FRANK  R,  ELDRIDGE,  Je. 

CHIEF  OF  THE  FAR    EASTERN  DIVISION  OF  THE    UKITED  STATES 

BUREAU  OF   FOREIGN  AND  DOMESTIC  COMMERCE;  LECTURER 

ON  FAR  EASTERN   ECONOMIC  SURVEY    IN  THE    SCHOOL 

OF  FOREIGN  SERVICE  OF  GEORGETOWN  UNIVERSITY 


MAPS 


D,  APPLETON  AND  COMPANY 

NEW  YORK  LONDON 

1921 


^^-  277  <f  7 


C50PYEIGHT,   1921,  BY 

D.  APPLETON  AND  COMPANY 


C>b 


1p.  \ 


PBlirrBD  IK   THE   UNTTED   eTATDS   Of  AMIBIOA 


PREFACE 

This  book  is  intended  to  serve  as  a  primer  on  Far  East- 
em  trade.    It  is  designed  for  the  student,  but  it  wiU  be 
found  useful  by  that  large  class  of  business  men  who  have 
felt  that  they  were  approaching  the  great  markets  of  the 
Orient  without  a  proper  knowledge  of  the  fundamental 
facts  concerning  the  history,  government,  and  commerce 
of  the  Oriental  peoples.    It  is  designed  to  be  informative 
rather  than  opinionative,  and  subjects  of  a  controversial 
nature  have  been  purposely  omitted.     I  have  striven  to 
make  it  more  a  compact  handbook  than  a  descriptive  or 
didactic  treatise,  and  for  that  reason  I  have  included  only 
such  references  to  habits  and  customs  as  were  absolutely 
necessary  to  bring  out  important  economic  facts.     The 
book  is  built  upon  the  theory  that  a  knowledge  of  com- 
merce is  essentially  a  knowledge  of  the  reasons  why  cer- 
tain coDunodities  dominate  the  trade  of  certain  regions. 
Predictions  as  to  the  possible  growth  of  the  import  trade 
of  the  various  countries  are  indulged  in  only  sparingly  as 
it  is  realized  that  such  growth  is  dependent  in  the  last 
analysis  upon  individual  enterprise  which  is  guided  only 
by  profitable  return.     To  encourage  unwise  or  fitful  devel- 
opment of  these  Far  Eastern  markets  is  the  last  thing  to 
be  desired  by  those  who  have  the  ultimate  growth  of  "our 
foreign  trade  at  heart.     The  present  development,  how- 
ever, is  anatyzed  fully  with  a  view  to  pointing  out  the  lines 
of  permanent  and  profitable  growth.    Many  works  on  the 
Far  East  have  been  consulted  freely,  and  special  mention 
of  these  is  made  at  the  close  of  each  part  of  the  text,  where 


VI 


PREFACE 


they  are  given  special  consideration  in  the  bibliographical 
notes.  The  appendix  is  considered  by  no  means  the  least 
important  part  of  the  book ;  an  attempt  has  been  made  to 
render  it  particularly  concrete  and  valuable  for  reference 
purposes. 

It  is  of  vital  importance  to  the  continued  prosperity  of 
the  United  States  that  new  markets  be  developed  to  replace 
those  of  the  countries  with  whom  we  formerly  traded 
but  whose  effective  buying  capacity  has  been  reduced  by 
the  consequences  of  war.  American  manufacturers  must 
export  greater  quantities  of  their  products  than  at  present 
in  order  to  keep  running  at  full  capacity  the  plants  which 
have  been  enlarged  to  meet  the  demands  of  the  last  seven 
years  and  to  continue  to  employ  all  American  workmen  at 
wages  that  will  enable  them  to  maintain  unimpaired  the 
American  standard  of  living  of  which  we  are  so  justly 
proud.  The  Far  East  offers  the  great  possibilities  of  an 
unexploited  field,  especially  as  the  600,000,000  souls  of 
China  and  India  alone  are  rapidly  developing  industrially 
already  need  large  quantities  of  American  machines  and 
metal  goods  of  various  types,  and  accept  readily  the  prod- 
ucts of  American  inventive  genius  and  technical  skill. 

The  domestic  market  of  the  United  States  has  hitherto 
been  of  such  supreme  importance  that  it  has  not  been  nec- 
essary for  American  merchants  to  familiarize  themselves 
with  the  markets  of  Asia,  but  the  present  commercial  de- 
pression demands  prompt  action.  The  representatives  of 
American  concerns  who  have  investigated  on  the  spot  the 
opportunities  of  the  Orient  report  that  satisfactory  outlets 
for  our  products  exist  even  now,  and  are  capable  of  unlim- 
ited development  along  certain  lines.  Knowledge  of  exist- 
ing  political,  economic,  and  commercial  conditions  is  evi- 
dently necessary  for  an  intelligent  study  of  marketing 
methods. 


PREFACE 


vu 


The  Far  Eastern  problems  that  will  be  discussed  at  the 
Disarmament  Conference  are  primarily  all  economic  prob- 
lems.    The   *' battle   of  concessions'*   has  its  present-day 
aftermath  in  a  jockeying  for  position  in  the  coming  race 
for  commercial  supremacy  in  China.    The  market  belongs 
to  the  adventurous  and  the  well  informed.    With  enormous 
capital  ready  for  investment,  we  must  sooner  or  later  make 
a  definite  decision  as  to  whether  or  not  we  wish  to  partic- 
ipate in  the  development  of  Asia.     We  are  handicapped  in 
many  ways,  but  most  severely  by  a  timid  investing  public 
and  a  lack  of  trained  men.    In  the  last  analysis,  our 
bankers  can  only  refiect  the  courage  and  confidence  of 
their  clients.    If  we  deliberately  decide  to  neglect  the  in- 
vestment opportunities  in  the  Orient,  we  must  content 
ourselves  with  a  restricted  foreign  trade,  a  lower  produc- 
tion   at   home,    and    ultimately   more    difficult    economic 
conditions  in  this  country.    If  we  face  the  situation  intel- 
ligently,  study  our  field,  invest  judiciously  and  wisely, 
there  can  be  no  doubt  about  the  ultimate  outcome.    It 
will  mean  wider  foreign  commerce,  greater  production  and 
greater  prosperity  at  home.    The  choice  is  with  the  Amer- 
ican people. 

F.  R.  Eldridge,  Jb. 


CONTENTS 

^  PAGB 

Preface v 

CHAPTER 

I.    Introduction 1 

Causes  of  Oriental  Backwardness 2 

Difficulties  Confronting  tlie  Prospective  Trader  .     .  3 

Character  of  the  Market 3 

^Area  of  Asia 3 

W*opulation  of  Asia 4 

^Climate  of  Asia S 

rRaces  and  Language  of  Asia 6 

4/Economic  Interdependence  of  Asiatic  Countries     .  7 

Relation  of  History  and  Laws  to  Commerce   ...  8 

Potentialities  and  Actualities  of  China     ....  9 

Japanese  Trade  and  the  War 9 

Effect   of   War   on   Far  Eastern    Colonial   Trade 

Policies 10 


PART  I 

CHINA  AND  JAPAN 

n.    History  op  China  and  Japan  during  Foreign  In- 
tercourse    15 

The  Attitude  of  China  and  Japan  to  Foreign  Inter- 
course        16 

Opening  of  China 16 

The  First  Invasion  from  Japan 17 

The    Opposition    to    Western    Influence    and    Its 

Decline 18 

England's  Entrance  into  China 19 

The  Taiping  Rebellion  in  China 22 

Turmoil  at  the  End  of  the  19th  Century  in  China  .  25 

The  Fall  of  the  Manchus 28 

Early  Intercourse  of  Japan  with  the  West     ...  28 

The  Opening  of  Japan 29 

The  Development  of  Japan  in  the  19th  Century     .  30 

ix 


X  CONTENTS 

CHAPTER  p^Qg 

III.    The   Constitutions  and  Politicaij   Parties   op 

China  and  Japan 32 

China: 32 

The  End  of  the  Chinese  Empire 32 

The   Structure  of  the   Chinese   Imperial   Govern- 
ment        35 

The  National  Assembly  of  1910 36 

The  Provinces  and  Duties  of  the  OflBcials     ...  37 

The  Provisional  Govern ment  of  1912 89 

The  Administrative  Conference  of  1913-14     ...  40 

The  Growth  of  Chinese  Political  Parties  ....  43 

The  Movement  to  Restore  the  Monarchy      ...  44 
The  "Twenty-one  Demands"  by  Japan    ' .      .      .      .46 

Death  of  Yuan  Shi-kai  and  War  with  Germany  .     .  47 

The  Lansing-Ishii  Agreement .  48 

The  Military  Agreement  of  1918     .     .      .      .     .%  .*  49 

Effects  of  China's  Entrance  into  the  WoHd  War     .  49 

The  Election  of  President  Hsu •    .  49 

Japan: 59 

The  Constitution  and  Political  Parties  of  Japan     .  50 

Structure  and  Powers  of  the  Japanese  Diet      .      .  61 

The  Genro  and  the  Cabinet ^ 

The  Organization  of  the  Judiciary 04 

The  Real  Character  of  the  Japanese  Constitution    .  64 

The  Evolution  of  Japanese  Political  Parties      .      .  54 

Count  Ito  and  Count  Okiima 66 

The  Choshu  Clan  and  Seiyu-kai  Party     ....  67 

The  Kohumin-to  and  Count  Okuma 57 

rv.    Tariffs,    Treaties    and    Commercial    Laws   in 

China  and  Japan 50 

China: 60 

Extraterritoriality  in  China 00 

The  International  Settlement  at  Shanghai     .     ,     !  62 

Foreign  Concessions 63 

Chinese  Tariff 64 

Maritime  Customs  Administration      .     .     !     .     !  66 

Japan: 66 

Early  Commercial  Treaties  with  Japan    ....  66 

The  Japanese  Statutory  Tariff 68 

The  Effect  of  Tariff  Changes  on  Industry     ...  68 
The  Opposition  of  England  to  an  Effective  Statu- 
tory Tariff gg 

The  Effect  of  Tariff  Reform  on  Revenue      ...  69 

The  Revision  of  Codified  Law 70 


CONTENTS  « 

chapter  pagb 

The  Judicial  System .  71 

Patent  Laws  and  Trade-Mark  Regulations    ...  71 

Land  Tenure  by  Foreigners 72 

V.    Agriculture,  Mines,  and  Manufacturing  Indus- 
tries OF  China 74 

Agricultural  Industry: 74 

Silk 74 

Oils  and  Oilseeds 74 

Rice 75 

Tea 76 

Cotton 77 

Tobacco 77 

Cereals 77 

Fibers 79 

Vegetable  Wax 78 

Vegetables 78 

Pastoral   Industries 78 

Forests 79 

Mines  and  Minerals: 79 

Coal 79 

Iron 80 

Copper 80 

Gold 81 

Silver,    Quicksilver,    Antimony,    and    Other    Min- 
erals      81 

Petroleum 82 

Manufacturing  Industries: 82 

The  Strawbraid  Industry 83 

The  Preparation  of  Proprietary  Medicines    ...  83 

Paper  Manufacture 83 

Firecrackers  and  Fireworks 84 

Earthenware,  Pottery  and  Chinaware     ....  84 

Grass  Cloth 84 

Cigarettes 84 

Vermicelli  and  Macaroni 84 

Mats 85 

Leather  Goods 85 

Varnishes 85 

VI.    Agriculture,  Mining  and  Manufacturing  Indus- 
tries OF  Japan     .     .     .     . 86 

Agriculture: 86 

Rice 88 


I 


3ni  CONTENTS 

Barley  and  Wheat '^^ 

Other  Grains -iilsQ 

Beans  and  Potatoes      ••••..!!]     89 
Other  Crops *     '    on 

Silk  .     :  ;  :  :  9? 

Tea »     •     .     .  91 

Pastoral  Industry .  91 

Cattle .     !     !  92 

Sheep •     ...  92 

Poultry  Farming ..'.'!  92 

Dairying  and  Meat  Preserving     .     .     .     '  '  93 

^its ."     *     '     93 

Mines  and  Mining 93 

Fisheries !     !     .*     94 

Forests !     !     !     94 

Manufacturing  Industries: !     !     !     95 

The  Electrical  Industry 95 

The  Cotton  Spinning  Industry      ..,,..     95 

o?^  Gas  Industry .*     .'     96 

shipbuilding 96 

Cotton,  Silk,  and  Woolen  Weaving      .     !     .*     !    96 

Machine  Manufacturing 97 

The  Manufacture  of  Paper .'97 

The  Chemical  and  Dyestuff  Industries     .     .     .     !     97 

Brewing 9g 

Arts  and  Crafts !     !     !     98 

Pottery !     !    99 

Lacquer  Wares 99 

The  Manufacture  of  Celluloid      ...!..     99 

The  Glass  Industry !     99 

Matches 99 

The  Refining  of  Sugar '     .  100 

Other  Industries 1W 

The  Future  of  Japanese  Industry      .     .     .     !     .  100 
Korea: ^      ^   iqi 

5^^* *      .  102 

Cotton  Cultivation 102 

Fruits  and  Vegetables 102 

Silk  Culture 103 

Pastoral  Enterprise *     .  103 

Mining .'103 

Fisheries IO4 

Forests ,     ,  IO4 

Manufacturing  Industries [  104 

Formosa: 106 

Rice 106 


CONTENTS  xiii 

CHAPTER  ,^ 

Sugar 106 

Tea 107 

Other  Crops 107 

The  Pastoral  Industry \  107 

j;?^stry ;  108 

Fisheries log 

Coal,  Gold,  Sulphur,  and  Other  Minerals     .     .     !  109 

Manufacturing 109 

Saghalien i     !     !     *  109 

Forestry ..!!.".*  109 

Fisheries  and  Mining no 

Vn.    Credit  Methods  and  Market  Analysis  of  China 

AND  Japan  .    .     • .  112 

China: ^12 

Exchange  and  the  Compradore  System    .     .     .     !  113 

Guilds  in  Export  and  Import  Trade 114 

Cotton  Goods 114 

Metals  and  Minerals 115 

Sundries \  ug 

Rice 117 

Munitions 117 

Coal .  117 

Fish 117 

Kerosene 117 

Leather [  117 

Paper 117 

The  Decline  in  the  Volume  of  Imports  ....  117 
Japan: ng 

Raw  Materials 119 

Oil  Cake 119 

Wool 119 

Sulphate  of  Ammonia i  119 

Iron  Ore 119 

Coal 119 

Kubber 119 

Fibers 120 

Hides [120 

Saltpeter ^    .     .     .     .  120 

Partly  Manufactured  Materials     .     .     .     .     .     .  120 

Pig  Iron 120 

Building  Materials 120 

Caustic  Soda 120 

Iron  Pipe 120 

I^es 121 


XIV 
CHAPTER 


CONTENTS 


Paper  Pulp 

Lead  Ingots 

Foodstuffs— Rice,  Sugar,  and  Beans 
Manufactured  Goods      .... 

Machinery [ 

Kerosene 

Paper ] 

Woolen  Goods 

The  Future  of  Japanese  Import  Trade 

Vin.    Chinese  Finance  and  Transportation  Develop- 
ment     

The   Effect   of  the  Boxer  Indemnity  on    Chinese 
Finance    

The  Condition  of  the  Chinese  Treasury 

The  Unmobilized  Credit  of  China      . 

The  New  Consortium 

Present  Railroad  Development 

The  Concession  Lines 

Chinese  Government  Railways 

Chinese  Private  Railroads   .     ,     ,     , 

'Railroads  Contracted  for     .      .     .      .' 

Manchurian  Railroads  Contracted  for 


PAGE 

121 
121 
121 
122 
122 
122 
122 
122 
129 


Bibliography  to  Part  I 


125 

125 
126 
127 
128 
128 
130 
130 
131 
131 
132 

133 


PABT  n 

THE  PHILIPPINES  AND  THE  DUTCH  EAST 

INDIES 

IX.    History  of  the  Philippines  and  the  Dutch  East 

Indies  during  Foreign  Occupation  ....  143 

The  Philippines: ^^^3 

Foreign  Occupation .'      '      *     '  143 

Discovery  of  the  Philippines  by  MageUan     '.     .*     .'  143 

The  Work  of  Legaspi 144 

Events  of  the  Latter  16th  Century  in  thePhiKp*- 

Pmes 145 

The  Developments  of  the  Early  17th  Century     .     .  146 

Manila  Occupied  by  the  English 147 

Insurrections  against  Spain      ....,,,  143 
The  Character  of  Spanish  Rule     ....','        148 

The  Revolt  at  Cavite *  149 

Acquisition    of    the    Philippines    by    the    United 
States      .     .     ,     , ^     ^  250 


CONTENTS  XV 

chapter  pagb 

The  Dutch  East  Indies : 151 

Early  Dutch  Ventures  in  the  East  Indies  ....  151 

The  Dutch  East  India  Company 152 

The  "Council  of  Defence" 153 

Theories  of  Colonization  and  Free  Trade  .  .  .  154 
Policies  of  the  Dutch  East  India  Company  .  .  .  154 
Trade  Control  Methods  of  the  Company      .      .      .  155 

The  Contingent  System 155 

The  Decline  of  the  Company  and  Its  Fall     .      .      .   156 
Java  after  the  Fall  of  the  Dutch  East  India  Com- 
pany         157 

The  Attempted  Reforms  of  1803 158 

The  Work  of  Governor  General  Daendels  ....   158 
British  Occupation  and  Reforms  of  Raffles    .     .     .  159 
The  Restoration  of  Dutch  Rule;  the  Dutch  Trad- 
ing Company 160 

The  Culture  System  and  Its  Failure      ....  160 


X.    Modern  Government  Policies  in  the  Dutch  East 

Indies  and  the  Philippines 162 

The  Dutch  East  Indies: 162 

The  Government  of  the  Dutch  East  Indies     .      .      .  162 

The  Power  of  the  Governor 163 

The    Provincial    Administration    of    the    Colonial 

Government 164 

Evils  of  Dutch  East  Indian  Government      .  .  165 

Considerations  Affecting  Colonial   Government   in 

the  Tropics 166 

Credit  Bondage 168 

Credit  Advances  as  an  Inducement  to  Labor     .      .  168 
"Particulars^  and  Other  Land  Tenure      ....  169 

Problems  of  Land  Tenure 169 

The  "Net  Profit  Svstem" 170 

The  Retention  of  the  Coffee  "Culture"     ....  170 

The  Philippines: 171 

Modern   Government  and  Policies  of  the   Philip- 
pines         171 

The  Continued  Activities  of  Aguinaldo     ....  171 
The  Arrival  of  the  Philippine  Commission     .      .     .  172 

The  First  American  Government 173 

The  First  Commission  and  Present  Powers  of  the 

Governor  General 174 

Legislative  and  Judicial  Functions  of  the  Govern- 
ment         175 


xvi  CONTENTS 

CHAPTER 

The  American  Policy  of  Education     ....       'i76 
Other  Developments  under  American  Rule     !     !     !  176 

XI.    The  Topography,  Agriculture,  and  Industries  of 

THE  Philippines jyg 

^^^ 179 

Oth^r  Food  Crops     .'.'..'.['.[]',  Jsi 

Hemp '*  -tg^ 

Copra '     *  *  1QO 

Sugar .!!!:;■         lii 

Tohacco *     '  1QK 

Fibers .'.'.*     I!        186 

Other  Possible  Crops     ...*.!!     1     ]     '  186 

Animal  Industry tof 

Fisheries i^L 

Forestry .'     .'     ^     !     !     !        188 

Manufacturing  Industries [     [  igg 

XII.    Topography,  Agriculture,  Minks,  and  Industries 

OF  the  Dutch  East  Indies 190 

Trade  Areas  of  the  Dutch  Ea«t  Indies,  Java,  and 

Madoera ^g^ 

The  Outer  Possessions    ....!].[        191 

Agriculture .'     !     *     *  192 

Sugar !!!..*        192 

Rubber .... 

Tea       ...  

Coffee !!!!!*  193 

Tobacco !!.!*'  194 

Copra  and  Coconut  Oil  .    .     !     !     |     [     ]     '     "  194 
Fibers tqr 

umme  and  Cmchona    ....  195 

jf  p^^ .'.*;;:  195 

Tapioca ^95 

^""^r. !     !     ;  195 

Tm  Mining jgg 

Coal  Mining jgg 

Gold    Mming ^gg 

Fetroleum ^  jgg 

Estate  Products  and  General  Ti^de    !     !     !     !     !  197 

XIII.    Commercial  Methods  and  Market  Analysis  of 

THE  Philippines  and  Dutch  East  Indies    .     .199 

The  Philippine  Islands :...»...  igg 

Cotton  Cloths ».!!!.  199 


CONTENTS  xvu 

chapter  p^^jj 

Iron,  Steel,  and  Machinery 2OO 

The  Future  of  the  Agricultural  Implement  Trade  .  200 

Rice 201 

Wearing  Apparel !     .     .  201 

Coal ••....  201 

Wheat  Flour .  202 

Illuminating   Oil .'     !     !     !  202 

Cotton  Yams 202 

Paper  Goods .*!!!!  203 

Other  Imports     . !     !     ]  203 

The  Future  of  American  Trade     ...!!!  203 

The  Dutch  East  Indies: !     !     !  204 

Total  Imports — Java  and  Madoera  ...,'.  204 
The  Possibilities  for  American  Cotton  Goods  .'  .  205 
Iron,  Steel,  and  Machinery      .....  206 

Fertilizera [206 

Foodstuffs 207 

Total  Imports — Outer  Possessions      .     .     .     .     !  207 

The  Sumatra  West  Coast '     *  2O8 

The  Sumatra  East  Coast     ....!!!!  208 

The  Singapore  Trade  Area !     !      '  208 

Credit  Terms .  208 

The   Growth   of   Free    Trade   in   the   Dutch    East 

Indies 209 

The  Dutch  East  Indies  Trade-Mark  Law      .'     .*     .*  209 
The  Dutch  Colonial  Legal  System  .     .     ...     .     .210 

The  Character  of  the  Courts [     '  2II 

The  'liandraads" '.'...  211 

Native  Courts  in  Independent  Principalities      !     .  212 

Bibliography  to  Part  II  .     . 214 


part  m 
BRITISH  INDIA,  BURMA,  AND  CEYLON 
XIV.    History  and  Government  op  British  India    .     .  221 

The  Conquests  of  Albuquerque 222 

The  Portuguese  in  India ]     [  222 

The  Decline  of  Portuguese  Influence  .  .  .  .  !  223 
Portuguese  Conciliation  with  England  ....  224 
Early  Adventures  of  the  London  Merchants  .  .  224 
Early  Activities  of  the  East  India  Company     .     .  225 

The  "Separate  Traders** 226 

Clive  and  the  French .*  227 

The  Reorganization  of  the  East  India  Company  .     .  228 


xviii  CONTENTS 

CHAPTER  ^^^^ 

The  Weakening  of  the  Company's  Monopoly  .    .     .229 

The  Mahratta  Wars *  230 

The  End  of  the  Company's  Monopoly     .     .     .     ,  230 

The  Sepoy  Mutiny '      *  231 

Reforms  of  1859 !     .     .  232 

Political  Divisions  of  India  under  British  Rule  '.     .  232 

The  British  Indian  Government 232 

Political  Divisions  of  Native  States     .....  233 

XV.    Agriculture  and  Industries  op  British  India    .  236 

Basic  Considerations  in  Indian  Economics    .     .        237 

Area  and  Topography .'238 

Religion  and  Caste 239 

Principal  Cities -     !     !     !  239 

Agriculture  and  Pastoral  Industry:    .     !      .  '         240 

J^^eat !     ;  240 

Rice 241 

Millet,  Barley,  Maize,  and  Pulse 241 

Sugar *  242 

Tea,  Coffee,  and  Spices 243 

Jute .  243 

Cotton  and  Cotton  Qoods 244 

Silk ,     .     ]     .  245 

Oilseeds .'.*.'.*  247 

Vegetable  Oils .'!!.*.'  249 

Hides  and  Skins !     ,'     .*  250 

Wool  and  Carpets *  251 

Indigo !     !     !  252 

Other  Agricultural  Products 252 

Mines  and  Minerals : [  252 

Coal .*     !  252 

Manganese  Ore 253 

Mica [[  253 

Iron  and  Steel .*     .'     .  253 

Other  Minerals *  254 

Forests  and  Forest  Products:      .     .     .'     [     .     ]     .254 

Shellac .*.'.*  254 

Other  Forest  Products .     \     .  255 

Fisheries         [     [  255 

XVT.    Market  Analysis  of  British  India 257 

India's  Trade  Balance 267 

The  Chief  Suppliers  of  Indian  Markets  ....  268 

Cotton  Piece  Goods 259 

Cotton   Yam ,     [  259 


CONTENTS 
chapter 

?^^'  •     •     • 260 

Iron  and  Steel 260 

^s?^^e^y .'!;;:  261 

Silk 262 

Chemicals  and  Drugs [     '  262 

Mineral   Oils '.'.*.'.'        263 

Liquors !     !     !     !      *  263 

Hardware !     !     !     !     *        264 

Paper  and  Pasteboard    ...!!!.[.  264 

|!i* . !     .*     .*  265 

Provisions ofis 

Railway  Materials     ....!...]'  266 

Motor  Cars,  Cycles,  and  Accessories    .'     .*     .*     *        266 
Conclusions  of  Indian  Market  Analysis     .     [     .     .  267 

XVII.    Agriculture,  Industries,  and  Market  Analysis 

OP  Burma 268 

Agriculture  and  Industries : 268 

Rice !     '     *         268 

Petroleum  Products       ...!...  269 

Cotton ,     '     '     '  270 

Beans 97/v 

Teak  and  Timber 970 

Tungsten ',','.'.''  271 

Raw  Hides  and  Skins     .     .  oti 

Silver 5^ 

Rubber £^ 

Pig   Lead .' £$ 

Tobacco ^7; 

^^"^ ::;;:;:  2?i 

Ain 073 

Jade  and  Rubies       ...  ....       o 

Lao : IJ3 

Cotton   Goods 274 

Jute  Manufactures iirt 

Silk  Goods      ...  Xi^ 

MetaJs ;     ; ^^ 

Hardware  and  Machinery    .     [      ] oyfi 

Provisions  and  Foodstuffs   .  o^ra 

Other  Imports      ....!.'     l!."     i]  276 

XVm.    Agriculture,  Industries,  and  Market  Analysis 

OF  Ceylon gyg 

Agriculture  and  Industries:     .     .  o^q 

^ 278 


CONTENTS 

CHAPTER  p/^OS 

Rubber 279 

Coconut  Products 280 

Cacao 280 

Cinnamon 280 

Citronella   (Lemon-GraM)   Oil      ......  280 

Tobacco 280 

Other  Products 281 

Plumbago 281 

Market  Analysis : 281 

Rice 282 

Cotton  Piece  Goods  .     * 282 

Metals  and  Metal  Ware      . 283 

Sugar 283 

Fertilizers 283 

Coal 283 

Rubber 283 

Petroleum  Products 283 

Motor  Cars 284 

Other  Imports 284 

Bibliography  to  Pabt  III 285 

PART  IV 

MALAYSIA,  FRENCH  INDO-CHINA,  AND 

SIAM 

XIX.    History  and  Government  of  Malaysu     .     .     .  201 

The  Founding  of  Penang 292 

The  Establislunent  of  Singapore 292 

The  Creation  of  the  Post  of  "British  Resident"  .     .  293 

The  Governor  and  the  Councils 295 

The  Judicial  System 295 

Local  Self -Government 296 

XX.    Products  and  Market  Analysis  of  Malaysia  .    .  208 

Rubber 299 

Cocoanuts       ............  300 

Tin 301 

Other  Minerals .  303 

Market  Analysis 303 

XXI.    History  and  Government  of  French  Indo-China  306 

The  Success  of  Doumer 307 

The  Reorganization  of  the  Government    ....  307 


chaptir 


CONTENTS 

The  Executive  Administration 
The  Budget  System       .     .     . 
The  Judicial  System 
Railroad   Development       .     . 
The  Present  Government 


page 

308 
308 
308 
309 
309 


XXII.    Products  and  Market  Analysis  of  French  Indo- 
China  311 

Rubber 312 

Coconut  and  Vegetable  Oils 312 

Other  Agricultural  Products 313 

Mining 313 

Industries 314 

Market  Analysis 314 

XXIII.  History  and  Government  of  Siam 317 

The  War  with  Burma 318 

The  First  Treaty 318 

The  Accession  of  King  Mongkut 319 

The  French  in  Cambodia 320 

Progress  under  King  Chulalonkom 320 

Siam  as  a  "Buffer  State" 320 

The  Executive  Government 321 

The  Judicial  System 321 

The  Encouragement  of  Education 322 

The  Railroads 322 

XXIV.  Products  and  Market  Analysis  of  Siam  .     .     .  324 

Rice 324 

Tobacco 326 

Maize 326 

Cotton 327 

Pepper *  327 

Sesamum 327 

Fisheries 328 

Forestry '.328 

Mines  and  Mining 328 

Gold 329 

Gems 329 

Market  Analysis 329 

Cotton  Goods 330 

Opium .'.'.'!  330 

^erosene 331 

Silk  Piece  Goods 331 

Bibliography  to  Part  IV 332 

XXV.    Commercial  Possibiutibs  in  the  Fab  East    .     .  334 


zzu 


CONTENTS 


APPENDICES 

CHAPTER  pj^Qg 

I.    Far  Eastern  Silver  Situation      ......       343 

n.    The  Incorporation  of  American  Companies  in  China  362 

III.  Extract  from  Hongkong  Ordinances  Relating  to  Com- 

panies Established  Outside  the  Colony    .     .      .      .366 

IV.  The  Chinese  Tariff  of  1918 368 

V.    Railway  Concessions  in  China  Held  by  Foreign  Pow- 
ers       394 

VI.  Principal  Undeveloped  Industrial  Concessions  in 
China  Other  than  Railways  Held  by  Foreign  In- 
terests       397 

Vn.    Chinese  National  Debt 401 

VIII.    The  Application  of  Law .     ,     .  409 

IX.    The  Indian  Merchandise  Marks  Manual  .    .     .     ,     .  419 

I^Ex 456 


MAPS 


Transportation  Map  op  China  . 


Front  cover 


Commercial  Map  op  the  Far  East  ....     Facing  page  454 


Map  op  China  Showing  Treaty  Poets  . 


.     Back  cover 


Ill 


TRADING  WITH  ASIA 


CHAPTER  I 


INTRODUCTIOK 


The  people  of  that  part  of  the  world  known  as  the  Par 
East  have  been  in  more  or  less  constant  contact  with  the 
people  of  Europe  and  America  since  the  early  part  of  the 
sixteenth  century.    During  that  period  they  have  watched 
the  Western  world  develop  a  civilization  by  means  of  a  se- 
ries of  epoch-making  inventions,  in  which  steam,  electricity, 
and  lately  the  internal-combustion  engine,  played  the  prin- 
cipal roles.    Because  some  of  them  have  failed  to  realize  the 
value  of  these  new  discoveries,  they  have  been  termed  back- 
ward.    They  have  more  recently  witnessed  the  logical  result 
of  what  they  have  probably  considered  a  mad  struggle  to 
overcome  time  and  space  in  a  world-destroying  conflict 
which  has  left  these  same  ** advanced''  nations  economically 
paralyzed.    For  centuries  they  have  been  urged  to  adopt 
the  new  civilization  of  the  West,  to  abandon  their  own  cus- 
toms and  adopt  *' higher''  standards,  and  some  of  these 
things  they  have  done.     They  have  readily  acquired  West- 
em  knowledge  of  sanitation,  medicine,  and  hygiene.    By 
successive  stages  they  have  evolved  from  oil  lamps  to  elec- 
tric lights,  from  oil-paper  to  glass  windows,  from  thatched 
roofs  to  galvanized  iron,  from  mud  and  straw  houses  to 
stone  and  brick.    But  by  adopting  these  more  useful  evi- 
dences of  Western  civilization,  they  have  by  no  means 
abandoned  all  the  ancient  customs  and  habits  that  long 


Ill 


2  TRADING  WITH  ASIA 

centuries  of  economic  necessity  have  inculcated  in  them. 
The  dense  population  of  most  of  the  Far  Eastern  countries 
has  long  kept  the  people  of  many  large  territories  depend- 
ent solely  upon  the  food  which  they  produce  for  immediate 
consumption,  and  has  permitted  no  great  accumulation  of 
wealth  in  goods  on  the  part  of  the  individual. 

Causes  of  Oriental  Backwardness.— By  the  use  of  labor- 
saving  devices  the  Western  producer  has  for  many  years 
been  steadily  increasing  his  store  of  wealth.    His  standards 
have  risen  because  he  has  been  less  and  less  dependent  upon 
his  own  and  others'  labor  and  to  a  greater  extent  upon  the 
more  efficient  work  of  mechanical  devices.     The  capital 
which  he  has  thus  accumulated  has  been  seeking  new  lands 
to  develop,  and  the  United  States  and  Latin  America  have 
reached  a  high  stage  of  development  through  the  invest- 
ment  of  this  accumulated  wealth.    When  the  Western  in- 
vestor turns  toward  the  Far  East,  he  finds  few  fertile  tracts 
of  land  which  are  not  already  supporting  the  limit  of  pop- 
ulation.   He  finds  these  peoples  in  an  economic  rut,  keep- 
ing just  ahead  of  starvation  by  the  greatest  manual  ex- 
ertion.    In  what  way  may  his  capital  be  invested  in  these 
countries  so  that  a  return  commensurate  with  the  risk  may 
be  earned?    In  the  case  of  the  tropical  peoples  the  more 
aggressive  white  settler  has  seized  the  reins  of  government 
and  with  one  exception  intends  to  keep  them.    In  the  Phil- 
ippines alone  a  new  and  daring  experiment  has  been  tried 
with  results  which  bid  fair  to  upset  the  established  theories 
of  colonization.     The  northern  peoples  have  been  found 
less  tractable.    In  one  case,  that  of  Japan,  a  warlike  and 
virile  people  have  adopted  so  energetically  the  beat  that  the 
West  has  had  to  offer  that  they  stand  to-day  as  one  of  the 
recognized  powers  of  the  world.    The  vast  reaches  of  China 
have  perhaps  been  saved  from  dismemberment  only  because 
of  the  mutual  jealousies  and  greed  of  the  Western  powers. 
These  powers  China's  rulers  have  desperately  played  the 


INTRODUCTION 


one  against  the  other,  in  an  effort  to  forestall  complete 
agreement  on  division  of  her  territory. 

Difficulties  Confronting  the  Prospective  Trader.— Such 
is  the  situation  that  confronts  the  American  seeking  to  ex- 
tend the  sales  of  his  goods  to  Far  Eastern  markets.  He 
may  have  enjoyed  a  certain  sale  of  his  product  in  parts  of 
Europe,  where  he  found,  before  the  World  War,  conditions 
somewhat  similar  to  those  at  home.  In  Latin  America  he 
has  perhaps  been  less  successful  because  of  his  unfamiliar- 
ity  with  the  Latin  civilization  which  has  been  transplanted 
there.  But  in  the  Far  East  he  is  confronted  with  a  civiliza- 
tion so  remote  from  anything  he  has  encountered  hereto- 
fore that  he  is  discouraged  at  the  start.  The  distance  is 
great,  the  shipping  facilities  are  unsatisfactory,  and  busi- 
ness is  conducted  in  a  manner  which  requires  more  time 
and  patience  than  he  believes  it  is  worth. 

Character  of  the  Market.— But  no  market  is  so  remote 
and  so  intricate  in  its  complexities  that  it  is  beyond  the 
reach  of  the  well  informed  and  the  adventurous.  No  mar- 
ket, moreover,  compares  with  the  Far  East  in  its  absolute 
call  for  both  of  these  characteristics  in  the  make-up  of  those 
who  would  capture  it.  Our  lack  of  interest  in  Asia  has 
been  important  in  its  effect  of  discouraging  original  re- 
search and  presentation  of  the  basic  economic  facts  concern- 
ing Asia  to  the  American  public.  Nevertheless,  certain  his- 
torical, legal,  and  economic  background  is  absolutely  essen- 
tial if  we  are  to  embark  upon  a  permanent  commercial 
career  in  the  Orient. 

Area  of  Asia.— Comprising  all  of  the  territory  extending 
from  the  southern  and  southwestern  borders  of  Siberia  to 
the  Indian  Ocean,  Asia  proper,  as  included  within  the  scope 
of  this  book,  is  divided  from  Asia  Minor  by  the  Indian- 
Afghanistan  and  Indian-Persian  borders,  and  includes  the 
homes  of  all  but  the  white  races  of  Siberia  and  Australasia. 
"Were  a  map  of  North  America  superimposed  upon  a  map  of 


4  TRADING  WITH  ASIA 

this  vast  area  at  like  latitudes,  the  Canadian  border  of  the 
United  States  would  correspond  roughly  with  the  Chinese- 
Siberian  border,  with  the  State  of  Washington  and  part  of 
Oregon  extending  into  Siberia.    The  Pacific  coast  of  the 
United  States  would  reach  to  the  Himalaya  Mountains, 
while  Mexico  and  Central  America  would  overlap  Burma, 
French  Indo-China,  Siam,  and  Malaya.    The  whole  extent 
of  India,  except  Burma,  would  represent  additional  terri- 
tory falling  outside  this  area,  while  southwest  China  with 
approximately  300,000  square  miles,  including  the  prov- 
inces of  Kweichow,  Kwangsi,  Hunan,  Kwantung,  Kiangsi, 
and  part  of  Fukien,  would  fall  within  the  Gulf  of  Mexico! 
The  tip  of  Florida  would  extend  over  to  Foochow,  China, 
opposite  Formosa;  Charleston  would  touch  the  China  coast 
above  Shanghai;  Norfolk  would  hit  Tsing-tao;  and  New 
York  City  would  touch  on  the  Korean  border  west  of  Muk- 
den, Manchuria.    Maine  would  extend  almost  to  the  Amur 
River  border  of  Siberia,  and  the  Great  Lakes  would  stretch 
north  from  Peking  to  Urga  in  Mongolia,  leaving  a  stretch 
in  Manchuria  of  300,000  square  miles  extending  over  On- 
tario and  Quebec.    Korea,  Japan,  the  Dutch  East  Indies, 
the  Philippines,  and  India  would,  of  course,  fall  entirely 
outside  the  area  covered  by  such  a  superimposed  map  of 
North  America.    The  comparisons  in  area  between  North 
America  (excluding  Canada)  and  Asia  are  shown  statis- 
tically in  square  miles  on  the  next  page. 

Population  of  Asia.— When  population  is  considered,  the 
comparison  between  these  two  regions  of  the  world  as 
shown  on  page  5  is  even  more  remarkable  and  brings  home 
in  a  very  striking  manner  the  vast  potentialities  of  Asia. 
Were  each  one  of  these  population  units  as  favorably 
situated,  from  an  economic  standpoint,  in  Asia  as  they  are 
in  North  America,  these  comparative  figures  would  have 
much  more  force  than  they  now  actually  possess.  The  effect 
on  civilization  of  such  economic  development  as  would  bring 


COMPABATIVB 


INTRODUCTION 
Abeas  of  Asia  and  Nobth  Amebica 


Asia 


Country 


China 

Burma  230,839 

Siam  195,000 

French  Indo- 
China       256,000 
Malaya  46,992 


Square  miles 
4,278,352 


Nobth  Amebica  (excludimq 
Canada) 


Country 


Square  miles 


728,831 


Sub-total 
British  India 
Dutch  East  Indiei 
Philippines 
Japanese  Empira 

Total 


5,007,183 

1,571,353 

736,400 

115,026 

245,551 


United  States 

(Including  Alaska, 
Hawaii  and  Porto 
Rico) 


3,627,557 


7,675,513 


Mexico 

Costa  Rica 

Guatemala 

Honduras 

Nicaragua 

Panama 

Salvador 

Total 


18,691 
48,290 
46,250 
49,552 
32,380 
13,176 


767,323 


208,330 
4,603,219 


COMPARATIVI;  PbPUIATIONS  OF  AsiA   AND  NoBTH   AmEBICA 


Asia 


Country 


Population 
1918  or  latest 


Chma  (estimated)  325,000,000 

Burma  12,115,217 

Siam  8,149,467 

French  Indo- 
China     16,990,000 
Malaya  1,036,999    39,291,683 


Sub-total 
British   India 
Dutch  East  Indies 
Philippines 
Japanese  Empire 


Nobth  America  (excluding 
Canada) 


363,291,683 

303,041,179 

47,204,000 

10,000,000 

78,708,000 


Country 


1918  or  latest 
Population 


United  States 


108,291,000 


Total 


802,244,862 


Mexico 

Costa  Rica 

Guatemala 

Honduras 

Nicaragua 

Panama 

Salvador 

Total 


15,502,000 
455,000 
2,119,000 
662,000 
800,000 
450,000 
1,288,000 

129,467,000 


these  two  factors  into  comparable  similarity  can  hardly  be 
estimated. 

Climate  of  Asia.— Those  familiar  with  the  climate  of 
North  and  Central  America  will  have  no  difficulty  in  gain- 
ing, from  the  description  of  the  comparative  area  of  Asia 


;:l 


6  TRADING  WITH  ASIA 

and  North  America,  some  idea  as  to  the  similarity  of  climatic 
conditions  between  the  two  continents.  So  close  is  the  com- 
parison that  the  wheat  belt  of  Ontario,  Minnesota,  and  the 
Dakotas  corresponds  in  climate  and  temperature  with  the 
great  plains  of  Manchuria  and  inner  Mongolia ;  the  desert 
of  Takla-Makan  is  in  the  same  latitude  as  Nevada,  and  the 
great  wastes  of  Gobi  and  West  China  are  comparable  with 
the  Rocky  Mountain  region  of  the  United  States.  It  is  in 
the  south  that  the  analogy  is  weakened  by  the  incomparably 
greater  heights  of  the  Himalayas  than  those  of  any  moun- 
tain range  of  northern  Mexico,  while  the  plains  of  Texas, 
falling  within  the  mountainous  regions  of  Yunnan  and 
West  Thibet,  present  widely  different  climatic  characteris- 
tics although  in  the  same  latitudes.  The  one  fundamental 
difference  of  great  economic  significance  is  the  lack  of  a 
western  ** coast**  to  China,  depriving  the  Chinese  of  the  lure 
of  the  ocean,  without  which  many  a  prairie  schooner  would 
never  have  braved  the  wilds  of  western  America. 

There  is  little  essential  difference  in  climate  between  the 
tropics  of  Dutch  and  British  India  and  the  tropics  of  South 
America,  while  the  similarity  between  the  Malay  Peninsula 
and  Central  America  is  more  marked  in  climate  than  in 
topography.  The  seacoast  of  China  is  similar  to  the  At- 
lantic coast  of  the  United  States  in  the  same  latitudes. 
Asia  thus  presents  a  diversity  of  climate  as  varied  as  the 
climates  of  Canada  and  the  Amazon,  with  an  added  element 
of  the  highest  mountain  ranpres  in  the  world  located  in  a 
position  analogous  to  northern  Mexico.  It  is  this  Himalaya 
range  which  produces  the  ** monsoon'*  of  India  by  chilling 
the  moist  winds  from  the  Indian  Ocean,  thus  affecting 
climatically  all  of  southern  Asia. 

Races  and  Languages  of  Asia.— Three  predominant 
strains  run  through  the  peoples  of  all  Asia.  The  Ayrian 
race  forms  the  nucleus  of  the  people  of  India  and  merges 
with  the  Malay  in  Burma,  reaching  a  decidedly  Malay- 


INTRODUCTION  7 

Mongoliau  strain  in  Siam  and  French  Indo-China.  In  the 
vast  area  of  China  the  races  vary  from  a  pure  Mongol,  in 
the  northwest,  to  variations  in  the  Manchus,  the  Chinese 
of  central  China,  and  the  southern  Chinese,  the  latter 
being  closely  akin  to  the  natives  of  French  Indo-China  and 
Siam.  The  natives  of  the  Dutch  East  Indies,  the  Philip- 
pines, and  Malaya  are  Malay  with  a  mixture  of  Arab  and 
Chinese.  The  race  of  the  Japanese  has  long  been  a  matter 
of  conjecture  and  dispute,  the  claim  that  they  are  a  Malay- 
Mongolian  mixture  perhaps  coming  nearest  the  truth 

Following  the  racial  strains,  the  languages  show  a  de- 
cided  tendency  to  vary  directly  with  the  race  mixture 
Hindustani  is  as  basically  different  from  Siamese  as  Siamese 
IS  from  some  south-China  dialects,  yet  each  has  influenced 
the  other.    Nothing  has  shown  the  independent  provincial 
growth  of  China  so  markedly  as  the  difference  in  dialects 
The  superimposed  Mandarin  is  the  only  common  language 
that  can  be  used  by  all  the  official  classes,  so  that  next  to 
inadequate  transportation,  if  not  because  of  it,  the  language 
difficulty  is  the  greatest  bar  to  any  hope  for  a  unified,  homo- 
geneous China.    Quite  distinct  from  the  Chinese  spoken 
language,  but  using  the  ideograph,  borrowed  from  China,  in 
the  written  language,  Japanese  is  by  far  the  most  difficult 
language  of  the  Ea^t  for  the  foreigner  to  master.    Malay 
on  the  otlier  hand,  is  comparatively  simple  and  serves  as  a 
basis  for  most  of  the  dialects  of  the  Island  tropics.    Spanish 
18  useful  m  the  Philippines,  but  more  Filipinos  speak  Eng- 
lish  now  than  ever  spoke  Spanish.    The  commercial  lan- 
guage m  the  East  is  English,  and  its  use  is  becoming  more 
widespread  among  the  educated  natives  every  year 

Economic  Interdependence  of  Asiatic  Coimtries.— The 
diversities  in  climate  and  resulting  diversities  in  production 
ftave  brought  about  a  certain  economic  interdependence 
among  the  several  countries  of  Asia.  Thus,  the  rich  agri- 
cultural lands  of  the  tropics  and  India,  particularly  the 


I 


8 


TRADING  WITH  ASIA 


III 


1' 


rich  rice  fields  of  Burma  and  French  Indo-China, 
help  to  feed  the  less  favored  portions  of  China  and  Japan 
and  receive  in  exchange  manufactured  goods  and  certain 
commodities  that  cannot  be  raised  in  the  tropics.  The  great 
trade  routes,  therefore,  lay  overland  from  India  and  Burma 
to  northern  China  and  by  water  around  the  China  coast 
and  the  Malay  Peninsula  to  India.  This  economic  self- 
sufficiency  of  Asia  was,  perhaps,  never  more  noticeable  than 
during  the  war,  when  trade  readjustments  on  a  strictly  in- 
ter-Asiatic basis  were  necessary  and  were  accomplished  with 
little,  if  any,  economic  upheavals. 

Relation  of  History  and  Laws  to  Commerca.— The  his- 
tory of  China  and  Japan  presents  an  amazing  variety  of 
contrasts  and  similarities,  contrasts  in  the  manner  in  which 
historical  lessons  have  been  accepted  by  the  two  peoples, 
and  similarities  in  the  development  of  the  two  peoples  un- 
der like  circumstances,  albeit  the  development  has  not  been 
contemporaneous  because  of  geographical,  racial,  and  other 
conditions.     On  the  other  hand,  the  history  of  the  tropical 
Far  Eastern  people  of  the  Philippines,  Dutch  East  Indies, 
French  Indo-China,  Malaya,  Siam,  and  British  India  is 
very  similar  in  many  respects,  varying  only  with  the  pe- 
culiar characteristics  of  the  European  nations  that  have 
imposed  their  own  determinations  upon  them.     The  buffer 
state  of  Siam  stands  alone  as  the  one  tropical  Oriental  coun- 
try that  has  escaped  foreign  domination,  and  the  history  of 
its  development  is  surprisingly  similar  to  that  of  Japan, 
leading  to  the  presumption  that  perhaps  the  relative  ''back- 
wardness'' of  the  European  colonies  is  not  in  spite  of,  but 
because  of,  foreign  control.     The  development  of  the  com- 
mercial laws  of  these  Far  Eastern  countries  reflects  very 
closely  their  political  history.    Japan  has  fallowed  Euro- 
pean, particularly  German,  codes  in  her  commercial  law*, 
perhaps  from  choice  and  because  of  their  easy  adaptability 
to  native  codes,  but  not  without  some  desire  to  placate  the 


INTRODUCTION  9 

most  exacting  of  those  foreign  nations,   without  whose 
consent  extraterritoriality  could  not  have  been  abolished. 
China  showed  a  tendency  to  adopt  the  same  tactics  until 
the  war  in  Europe  and  her  entrance  into  the  League  of 
Nations  immeasurably  advanced  her  chances  for  undictated 
legal  autonomy.     The  tropical  countries,  except  Siam,  have 
all  adopted  modified  systems  based  upon  the  home  laws,  and 
any  development  must  necessarily  follow,  rather  than  pre- 
cede, greater  economic  independence.    The  American  sys- 
tem in  the  Philippines,  with  modifications  dictated  from 
time  to  time  by  the  policy  of  gradual  aspiration  to  inde- 
pendence, may  prove  the  forerunner  of  like  changes  in  the 
other  tropical  countries. 

Potentialities  and  Actualities  of  China.— The  tempta- 
tion to  consider  Asiatic  resources  in  their  potentialities 
rather  than  in  their  actualities  eventually  has  done  much  to 
discourage  and  dishearten  the  prospective  trader  and  in- 
vestor.   An  overstatement  of  the  facts  is  in  all  respects  as 
undesirable  as  an  understatement,  and  there  is  no  way  to 
give  the  exact  picture  except  to  recite  the  actual  extent  of 
the  present  production  in  each  of  the  principal  commodities. 
While  such  a  method  of  presentation  is  not  conducive  to 
imaginative  flights,  and  its  chief  drawback  lies  in  the  rather 
dry  and  precise  statements  which  exactness  dictates,  we 
have  sought  to  sacrifice  style  to  staidness  only  when  preci- 
sion could  be  attained  in  no  other  way.    In  the  face  of  all 
that  has  been  said  about  the  potentialities  of  China  it  is 
feared  that  the  export  figures  during  the  past  five  years, 
representing  the  only  true  index  to  production,  show  a 
rather  depressing  condition.     The  inordinate  rise  in  prices 
had  so  far  concealed  the  true  condition  that  many  will  be 
loath  to  believe  that  the  volume  of  China's  export  trade 
was  much  smaller  in  1919  than  in  1914. 

Japanese  Trade  and  the  War.— What  China  lost  through 
the  dislocation  and  withdrawal  of  shipping  due  to  the  war 


t 


10 


TRADING  WITH  ASIA 


INTRODUCTION 


11 


and  the  high  price  of  silver— the  medium  in  which  her  prod- 
ucts were  valued  for  sale  to  countries  on  a  correspondingly 
lowered  gold  ba^is— Japan  gained  by  becoming  the  entrepot 
for  Far  Eastern  shipping  through  her  control  of  practically 
all  the  merchant  vessels  left  on  the  Pacific.  In  a  large 
measure  Japan's  industrial  growth  was  predicated  upon  this 
control.  As  a  result,  Japan's  trade  increased  remarkably, 
not  only  in  value,  but  in  volume  as  well.  The  character  of 
Japan's  development  was  well  illustrated  by  the  heavy  im- 
ports of  raw  materials  from  America  and  India  and  the 
large  exports  of  manufactured  goods  to  China  and  the  South 
Seas.  In  this  way  Japan  catered  to  the  starving  markets 
of  the  Far  East  at  a  time  when  all  European  markets  were 
closed  and  America's  lack  of  ships  and  preoccupation  with 
furnishing  supplies  to  Europe  permitted  only  casual  par- 
ticipation  in  the  trade.  The  war  trade  which  Japan  built 
upon  the  ruins  of  European  commerce  with  the  Orient  bids 
fair  to  be  only  a  temporary  structure  erected  upon  the  sands 
of  Japan's  economic  unfitness  in  many  lines  of  industry. 

Effect  of  War  on  Far  Eastern  Colonial  Trade  Policies. 
— ^Not  the  least  interesting  studies  of  commercial  history 
during  the  war  are  those  of  the  colonial  trade  developments 
in  the  Far  East.  The  Dutch  East  Indies,  cut  off  from 
their  usual  markets,  turned  instinctively  to  Japan  and  the 
United  States,  and  in  the  latter  case  many  of  our  traders 
discovered  for  the  first  time  the  source  of  many  of  their  im- 
ports from  Germany  and  Holland.  The  growth  of  the 
"Dutch  Colonial"  sentiment  in  the  colony's  population  dur- 
ing the  war,  demanding  as  it  did  free  markets  for  its  prod- 
ucts without  the  necessity  of  paying  tribute  by  transship- 
ment through  Holland,  gave  an  added  impetus  to  the  growth 
of  direct  trade  which  commercial  and  economic  considera- 
tions had  already  dictated.  In  the  British  colonies,  how- 
ever, a  somewhat  different  development  took  place.  Realiz-  * 
ing  her  inability  to  control  India's  exports  of  raw  material 


as  in  the  past.  Great  Britain,  rather  than  encourage  an 
outlet  through  direct  channels,  adopted  the  policy  of  en- 
couraging industrial  growth,  although  such  a  policy  was 
directly  inimical  to  British  markets  for  manufactured  goods 
in  India  and  the  Far  East.    The  long  view  was  taken,  how- 
ever, that  prosperous,  industrial  India  was  a  greater  asset 
to  the  Empire  than  an  agricultural  India  weaned  from  Im- 
perial economic  control.     The  policy,  while  not  carried  out 
in  its  entirety,  has  had  a  profound  effect  upon  Indian  eco- 
nomies, and  the  industrialization  of  India  has  carried  in  its 
train  a  score  of  social  and  political  consequences.     The  ef- 
fect upon  other  countries  in  the  Orient  whose  pre-war  trade 
with  India  was  important  has  been  equally  farreaching. 
British  Malaya,  on  the  other  hand,  producing  three  -com- 
modities of  immense  significance  in  the  war — rubber,  tin 
and  coconuts,  has  been  encouraged  in  extensive  production 
as  an  agricultural  and  mining  asset  to  the  Empire.    In  the 
same  manner  the  French  have  sought  to  utilize  French  Indo- 
China,  with,  however,  only  indifferent  success,  due  primarily 
to  the  disabilities  of  the  French  as  colonizers  and  also  to 
the  relatively  restricted  resources  of  the  colony.    Our  own 
experience  in  the  Philippines  has  been  decidedly  more  en- 
couraging, and  the  handsome  profits  made  in  coconut  oil 
have  only  been  partially  counterbalanced  by  the  losses  in- 
curred from  too  hasty  and  ill  advised  expansion  of  the  oil- 
mill  industry.     In  their  steady  and  patient  industry  during 
a  period  of  turmoil  in  Europe,  the  native  colonials  have 
displayed  in  every  instance  the  real  economic  potentiality 
of  the  East— frugal  and  industrious  labor. 

In  the  face  of  such  a  diversity  of  conditions,  it  has  been 
no  small  task  to  collect  from  a  number  of  sources  all  of  the 
pertinent  facts  relating  to  the  history,  government,  re- 
sources, and  trade  of  Asia.  Brevity  and  conciseness  have 
been  striven  for,  and  the  aim  in  writing  the  following  chap- 
ters has  been  to  present  in  the  fewest  possible  words  all 


I 


12 


TRADING  WITH  ASIA 


that  is  worth  while  on  every  important  phase  of  each  sub- 
ject. The  arrangement  of  the  material  on  resources  and 
trade  has  been  by  commodities,  so  that  the  reference  value  of 
the  book  would  be  enhanced.  No  attempt  has  been  made  to 
cover  any  subject  exhaustively,  and  the  bibliographies  are 
intended  as  a  guide  to  further  reading  for  the  student  whose 
interest  has  been  aroused  in  any  particular  i)art  of  the  work. 
The  files  of  the  Far  Eastern  Division  of  the  Bureau  of  For- 
eign and  Domestic  Commerce  have  furnished  much  of  the 
economic  material,  and  these  are  always  at  the  disposal  of 
those  seeking  further  enlightenment. 


PART  I 


CHINA  AND  JAPAN 


J!i 


i 


CHAPTER  II 


HISTORY  OP  CHINA  AND  JAPAN  DURXNG 
FOREIGN  INTERCOURSE 

The  Attitude  of  China  and  Japan  to  Foreign  Inter- 
course.— There  is  nothing  more  significant  in  the  modem 
history  of  the  Orient  than  the  manner  in  which  the  two 
great  nations,  China  and  Japan,  accepted  the  coming  of  the 
foreigner.  Greeted  wholeheartedly  by  Japan  in  1542,  the 
foreigner,  by  an  undue  zeal  in  spreading  the  Gospel,  paved 
the  way  to  his  own  expulsion  in  1640,  setting  up  a  barrier 
against  the  West  which  was  only  removed  by  the  influence 
of  the  American  Admiral  Perry's  big  guns  in  Tokyo  Bay 
in  1854.  China  accepted  the  coming  of  the  foreigner  grudg- 
ingly, confined  his  activities  to  narrow  precincts  in  the 
larger  ports,  and  after  a  series  of  unsuccessful  wars  was 
compelled  to  recoemize  in  1842  the  claims  of  the  **foreign 
devils '*  to  rights  of  residence  and  trade.  What  Japan 
yielded  as  the  inevitable  had  to  be  wrested  from  China,  but 
this  f a«t  would  not  have  been  of  great  consequence  had  it 
not  been  the  origin  of  the  attitudes  toward  the  West  in  the 
two  countries,  attitudes  fundamentally  different  and  which 
profoundly  affected  the  history  of  the  succeeding  century. 
When  Japan  resolved  to  throw  open  her  doors  and  accept 
the  foreierner,  she  decided  at  the  same  time  to  admit  that 
the  marvelous  inventions  that  Perry  had  demonstrated  be- 
fore the  awestruck  Shogun  on  the  shores  of  Tokyo  Bay  were 
evidences  of  a  superior  civilization.  From  that  time  (1854) 
onward,  it  became  the  resolve  of  the  thinking  Japanese  to 
master  this  new  civilization  before  it  mastered  them.    China 

15 


16 


TRADING  WITH  ASIA 


HISTORY  OF  CHINA  AND  JAPAN 


17 


showed  no  such  fixity  of  purpose.  The  only  tliought  in  the 
Chinese  official  mind  from  1842  until  1911  was  to  seek  every 
means  to  check  the  foreigner  in  his  purpose  of  opening  up 
the  country  to  Western  intercourse.  Whether  this  was  ac- 
complished by  intrigue  or  by  open  obstruction  mattered 
little  so  long  as  the  net  result  was  to  offset  the  efforts  which 
the  West  was  making  to  bring  China  into  line  with  Western 
nations.  China  formerly  had  been  successful  in  assimilat- 
ing her  conquerors  by  the  simple  process  of  passive  resist- 
ance, but  the  flood  of  Western  civilization  which  beat 
against  her  shores  was  too  great  to  be  overcome  in  this  man- 
ner. The  outcome  was  that  China,  almost  completely  dis- 
membered and  hopelessly  stifled,  sought  to  express  in  revo- 
lution  her  purpose  to  conciliate  Western  knowledge,  fifty- 
seven  years  after  Japan,  foreseeing  the  inevitable,  had  grace- 
fully  bowed  to,  and  very  nearly  mastered,  it.  Any  other 
reading  of  Oriental  history  during  the  period  of  foreign 
intercourse  fails  to  account  satisfactorily  for  the  present 
wide  differences  in  the  condition  and  general  advancement 
of  the  Empire  of  Japan  and  of  the  present  Republic  of 
China. 

Opening  of  China.— Early  in  the  sixteenth  century 
China's  loosely  knit  administration  under  the  Ming  Em- 
peror Cheng-te  had  come  in  contact  with  the  first  foreigners 
who  approached  China  from  the  sea,  an  expedition  under 
the  Portuguese  D'Andrade,  which  arrived  off  Canton  in 
1511.  The  leader  of  this  expedition  went  to  Peking,  where 
he  was  received  as  a  quasi  ambassador,  but  the  outrageous 
acts  of  his  followers  at  Ningpo  and  elsewhere  leil  to  his  ban- 
ishment and  death.  Soon  after,  in  1535,  a  massacre  of  Por- 
tuguese  took  place  at  Fooehow.  After  much  negotiation  the 
Canton  officials  permitted  the  Portuguese  to  settle  on  the 
Macao  Peninsula,  just  south  of  Canton,  in  return  for  an 
annual  rental.  Although  in  constant  conflict  with  pirates 
and  others,  the  trade  was  so  lucrative  that  five  or  six  hun- 


dred  Portuguese  adventurers  soon  made  this  settlement 
their  headquarters. 

Because  of  the  acts  of  these  early  European  settlers,  the 
missionary  Xavier  was  refused  permission  to  land  on 
Chinese  soil.  He  took  up  his  residence  on  an  island  out- 
side Canton  but  died  in  1552  without  achieving:  his  desire 
to  carry  a  message  of  peace  and  goodwill  to  the  Chinese. 
The  missionary  Ricci  was  more  successful  in  1582,  having 
prepared  the  way  by  a  study  of  the  language  and  of  the 
religious  beliefs  of  the  people.  He  was  received  at  Peking, 
where  his  scientific  knowledge  opened  the  way  for  some 
real  accomplishments.  Among  other  things  he  translated 
six  books  of  Euclid  into  Chinese  and  also  wrote  a  work  in 
Chinese  on  the  character  and  attributes  of  God.  This  early 
idea  of  Ricci  has  now  been  revived,  and  to  reach  the  hearts 
of  the  Chinese  through  propagation  of  scientific  and  general 
knowledge  is  the  task  of  the  modern  missionary. 

The  First  Invasion  from  Japan.— The  years  which  fol- 
lowed were  marked  by  a  foreign  invasion  of  a  quite  different 
character.  The  Japanese  had  obtained  in  1552  a  footing 
on  the  coast  of  Chekiang  Province,  had  fortified  their  po- 
sition, and  defended  it  successfully.  From  this  vantage 
point  Nanking  on  the  Yangtse  was  besieged  unsuccessfully, 
but  the  presence  of  the  invaders  reduced  the  central  prov- 
inces to  a  chronic  state  of  disorder.  In  1592  the  Japanese 
invaded  Korea,  reached  Seoul,  the  capital,  and  were  met  by 
a  Chinese  force,  sent  in  response  to  an  appeal  from  the 
Korean  Emperor,  on  the  Yalu  near  Pingslang,  at  almost  the 
same  spot  where  three  hundred  years  later  (1894)  they  were 
to  meet  another  Chinese  army.  Although  defeated  by  the 
Chinese,  Hideyoshi  was  so  incensed  by  the  action  of  China 
in  sending  low-ranking  ambassadors  to  negotiate  peace  that 
he  had  nearly  gathered  together  his  exhausted  resources  for 
a  fresh  attack  when  he  was  overtaken  by  death.  This  put 
an  end  to  the  war. 


18 


TRADING  WITH  ASIA 


The  Opposition  to  Western  Influence  and  Its  Decline. 

—The  evident  esteem  with  which  foreign  missionaries  were 
held  by  the  first  Manchu  Emperor,  Sun-chi,  whose  dynasty 
had  finally  succeeded  the  tottering  Ming  dynasty,  was 
given  a  new  meaning  when  he  advised  his  people  in  his  six- 
teen maxims  ''to  avoid  strange  sects/'  It  became  evident 
from  this  time  that  the  missionaries  who  had  been  received 
with  such  effusion  by  the  Manchu  Court  were  more  honored 
for  their  scientific  knowledge  than  for  their  religious  belief. 
Until  his  death  in  1710  the  famous  Manchu  Emperor  was 
in  constant  conflict  with  the  missionaries,  attempting  to 
thwart  their  efforts  in  every  manner  except  actual  banish- 
ment. This  probably  would  have  been  impracticable,  for 
the  Manchus  exercised  only  a  precarious  and  largely  nom- 
inal control  over  China  in  the  face  of  many  attempts  to  re- 
store the  Mings. 

An  attempt  to  banish  the  missionaries  was  made  early  in 
the  reign  of  the  next  Emperor,  K'ang-hi,  and  over  300 
churches  were  destroyed  in  an  effort  to  compel  all  foreigners 
to  retire  to  Macao,  but  the  possibility  of  a  Mongol  invasion 
soon  engaged  the  attention  of  the  Manchus  elsewhere. 
Chinese  sentiment,  however,  was  against  Christians  in  par- 
ticular and  foreigners  in  general  and  not  until  1727  was  a 
foreign  emissary  successful  in  approaching  the  Court.  The 
Russian  embassy,  then  received,  accomplished  two  things. 
By  arranging  for  the  despatch  of  Russian  youths  to  study 
Chinese,  a  firm  footing  was  established  in  Peking  by  Russia; 
and  by  designating  a  number  of  persons  to  attend  and  super- 
vise these  youths,  valuable  diplomatic  agents  and  constant 
intercourse  between  the  Russian  and  Chinese  capitals  were 
instituted.  The  Russian  emissary,  by  insisting  upon  deal- 
ing directly  with  the  Emperor  and  handing  his  credentials 
to  him  instead  of  depositing  them  on  a  table,  as  had  for- 
merly been  the  custom  with  foreign  embassies,  emphasized 
the  beginning  of  direct  personal  relations  between  foreign 


HISTORY  OF  CHINA  AND  JAPAN 


19 


sovereigns  and  the  Emperor  himself.  One  result  of  this 
stand  was  a  reconciliation  between  the  missionaries  and  the 
Court. 

The  next  Manchu  Emperor,  Yung-cheng,  ascended  the 
throne  in  1735  and  soon  started  upon  a  military  career 
which  was  to  enlarge  his  empire  and  enrich  his  treasury  to 
an  extent  unknown  to  his  predecessors.  His  principal  con- 
quests extended  along  the  western  frontier  and  eastern 
Turkestan.  The  inroads  of  the  northern  chief,  Galdan, 
had  led  to  an  exodus  of  the  more  peaceful  Tourgots  of  this 
region  to  the  Russian  Volga  region,  where  they  were  per- 
mitted to  remain  for  half  a  century,  until  the  return  of  their 
native  land  to  Chinese  control  created  an  irresistible  impulse 
for  repatriation.  This  started  600,000  on  a  fateful  journey 
which  ended  in  disaster,  those  not  drowned  in  Lake  Ten- 
ghis  in  a  mad  attempt  to  quench  their  long-enduring  thirst 
being  massacred  by  wild  tribes.  The  conquest  of  Burma 
was  next  undertaken  and  led  to  the  payment  of  tribute  to 
China  by  that  country  until  some  years  after  it  was  nomi- 
nally under  British  rule.  By  similar  conquest  Cochin 
China  became  a  tributary  state,  while  Tibet,  after  many 
campaigns  and  much  intrigue,  recognized  the  suzerainty  of 
China. 

England's  Entrance  into  China.— Although  England 
had  attempted  many  times  during  the  reign  of  Chienlung 
to  open  diplomatic  intercourse,  the  efforts  had  not  been 
successful,  and  privileges  of  trade  at  Canton,  Amoy,  and 
Ningpo  had  only  been  obtained  by  force.  The  greed  of  the 
local  mandarins  had  tended  to  make  profitable  trade  impos- 
sible, and  burdens  were  heaped  upon  a  trade  which  would 
have  enriched  both  native  officials  and  merchants  had  they 
been  content  with  a  nominal  gain.  In  1792  Lord  Macart- 
ney was  sent  as  a  special  ambassador  to  the  Chinese  court. 
He  was  received  at  Tientsin  with  great  pomp,  although  the 
boats  which  bore  his  party  to  Tungchow,  the  port  of  Peking 


20 


TRADING  WITH  ASIA 


HISTORY  OF  CHINA  AND  JAPAN 


21 


on  the  Peiho  River,  bore  the  Chinese  inscription,  unknown 
to  the  Englishmen  at  the  time, '  *  Tribute  bearers  from  Eng- 
land.'' Upon  reaching  the  royal  presence  every  effort  was 
made  to  compel  the  British  Ambassador  to  do  the  **  kow- 
tow, ' '  or  ceremonial  bow,  but  he  refused.  He  brought,  how- 
ever, presents  ranging  from  matches  to  carriages,  which 
required  the  services  of  3,000  coolies  in  conveying  them 
from  the  boat  to  the  palace.  The  results  of  this  first  formal 
mission  are  typical  of  the  Chinese  attitude  toward  the 
West.  Though  every  courtesy  and  good  will  was  displayed 
toward  the  person  of  the  ambassador,  no  commercial  privi- 
leges except  permission  to  trade  at  Canton  were  gained,  and 
the  exdusiveness  of  the  Chinese  court  was  not  broken  down 
in  the  least. 

Meanwhile  the  first  American  clipper  ships  had  arrived  in 
Canton  in  1784,  and  by  1805  thirty-seven  American  clippers 
had  carried  nearly  six  million  dollars  worth  of  American 
goods  to  China,  bringing  back  an  equal  amount  of  Chinese 
products.  In  1834  Lord  Napier  was  appointed  by  the 
British  government  to  take  over  the  trading  rights  hereto- 
fore exercised  by  the  East  India  Company  at  Canton. 
The  opposition  which  he  experienced  was  largely  due  to  the 
opium  trade  which  the  East  India  Company  had  built  up 
between  India  and  China.  The  trade  had  be(m  declared 
illegal  by  the  Emperor,  Kia-K'ing,  K'ien-lung's  successor, 
who  thereby  lost  a  good  revenue  from  customs  duty,  while 
the  local  mandarin  was  enriched  by  permitting  illicit  smug- 
gling of  the  drug.  In  the  face  of  many  vexations  and  per- 
secutions Lord  Napier  continued  to  hold  out  for  the  single 
principle  of  the  right  to  trade.  After  his  death  in  1834,  the 
British  merchants  at  Canton  petitioned  the  British  govern- 
ment to  take  effective  steps  to  open  the  Chinese  empire  to 
trade.  Captain  Elliott,  the  successor  of  Lord  Napier,  was 
quite  as  unsuccessful  in  asserting  his  position  as  a  represent- 
ative of  the  British  government.    Meanwhile  the  opium 


question  was  becoming  a  prominent  one  in  the  empire.     Al- 
though the  local  mandarins  professed  their  horror  at  the 
wide  use  of  the  drug,  they  continued  to  enrich  themselves 
by  permitting  illicit  smuggling  all  along  the  coast  and  ille- 
gal cultivation  of  the  poppy  in  the  interior.    The  Peking 
court,  where  Tao-kwang  had  begun  his  reign  in  1820,  con- 
tinued to  excite  feeling  against  the  foreigner  by  stirring  up 
the  anti-opium  Chinese.     The  climax  of  the  situation  was 
reached  when  a  specially  appointed  commissioner  of  the 
Peking  court,  named  Lin,  demanded  that  the  British  mer- 
chants at  Canton  deliver  up  all  opium  in  their  possession. 
After  bitter  negotiations,  some  20,000  chests  were  handed 
over  to  the  Chinese  authorities.    Encouraged  by  his  suc- 
cess, the  Chinese  Commissioner  further  demanded  the  right 
to  punish  Europeans  who  committed  crimes  on  Chinese 
soil,  and  upon  the  refusal  of  the  British,  called  upon  his 
countrymen  to  arm  themselves  against  the  foreigners.     The 
first  battle  in  the  First  Opium  War  between  the  British 
and  Chinese  was  a  naval  engagement  at  Chuanpi,  in  which 
many  Chinese  junks  were  destroyed.    In  the  summer  of 
1841  Admiral  Bremer  blockaded  Canton,  took  Ningpo,  and 
soon  arrived  at  Taku,  near  Tientsin.    Here  the  expedition 
was  met  by  the  Governor  General  of  Chihli,  who,  fearful  of 
the  effect  of  the  foreigners  upon  the  court  and  his  own 
position,  succeeded  by  all  of  his  Oriental  wiles  in  persuad- 
ing the  English  to  return  to  Canton  for  negotiation.    Upon 
the  return  to  Canton,  the  seriousness  of  the  situation  was 
fully  realized.    A  native  army  had  been  raised  and  dis- 
persed by  a  British  force  near  Macao,  but  with  the  British 
fleet  no  longer  menacing  Peking,  it  required  the  taking  of 
several  forts  leading  to  Canton  to  bring  the  Chinese  to 
terms.     These  terms,  proposed  early  in  1841,  were  the  ces- 
sion of  the  Island  of  Hongkong  to  the  British  Crown,  the 
payment  of  an  indemnity  of  six  million  dollars  for  opium 
destroyed,  and  the  opening  of  official  intercourse  between 


22 


TRADING  WITH  ASIA 


HISTORY  OF  CHINA  AND  JAPAN 


English  and  Chinese  officials  on  terms  of  international 
equality,  as  well  as  the  resumption  of  British  trade  at  Can- 
ton. But  the  Emperor  showed  no  disposition  to  accept  this 
decision,  and  issued  numerous  edicts  offering  rewards  for 
Captain  Elliott,  Admiral  Bremer,  and  other  English  leaders 
of  the  expedition.  By  May,  1851,  50,000  Chinese  troops, 
unarmed,  had  gathered  in  the  neighborhood  of  Can- 
ton, and  after  the  British  fleet  off  Canton  had  been  attacked 
at  night  the  war  was  formally  resumed.  Realizing  that  the 
only  sure  results  could  be  obtained  from  the  Emperor  at 
Peking,  the  British  fleet  again  sailed  north,  took  Amoy,  and 
after  capturing  Chenhai  pushed  on  to  Ningpo,  Shanghai, 
and  Chenkiang.  In  all  of  these  engagements  little  resist- 
ance was  encountered  by  the  superiorly  armed  British. 
Peace  was  finally  concluded  in  1842  at  Nanking  on  the 
terms  demanded  at  Canton,  with  the  additional  demands  of 
fifteen  million  dollars  and  the  opening  of  the  ports  of 
Amoy,  Foochow,  Foo,  Ningpo,  and  Shanghai  to  trade. 

The  Taiping  Rebellion  in  China.— With  the  signing  of 
the  Nanking  treaty  in  1842,  China  showed  no  tendency  to 
bow  to  the  inevitable.  Difficulties  continued  to  be  experi- 
enced at  Canton  which,  because  of  its  distance  from  the 
actual  seat  of  the  war,  was  not  impressed  by  the  results. 
Secret  societies  fanned  the  fire  of  rebellion,  which  the  Em- 
peror had  sought  to  turn  against  the  foreigner  with  such 
disaster.  By  1853  organized  raids  on  Manchu  garrisons, 
resulting  in  the  ruthless  extermination  of  the  whole  force, 
were  common  occurrences  along  the  Yangtze.  The  rebels, 
or  Taipings,  had  now  become  firmly  intrenched  along  the 
Yangtze  and  in  March,  1853,  under  the  leadership  of  Tien- 
wang,  began  to  march  northward  toward  Peking.  The 
reputation  of  these  rebels  for  cruelty  had  become  so  terrible 
that  their  march  was  practically  unimpeded  by  the  flight  of 
whole  Manchu  garrisons  before  them.  In  six  months  they 
had  captured  twenty-six  cities  and  finally  intrenched  them- 


23 


selves  near  Tientsin,  within  a  hundred  miles  of  the  capital. 
Being  dependent  upon  plunder  for  their  supplies,  move- 
ment was  essential  to  the  life  of  the  expedition,  and  when 
the  fortification  of  Tientsin  withstood  their  attack,  the  fail- 
ure to  reach  Peking  had  to  be  realized.  The  way  back  to 
Nanking  was  now  barred  by  Imperial  troops,  but  the  rebel 
chief  managed  to  cut  .his  way  through.  Li  Hung-chang, 
who  was  destined  to  fill  a  large  place  in  the  later  history  of 
China,  was  one  of  those  who  headed  independent  bodies  of 
loyal  troops  to  harass  the  retreating  rebels. 

The  rule  which  the  Taipings  now  set  up  at  Nanking  was 
a  veritable  reign  of  terror,  and  this  condition  affected  their 
field  forces  who  gradually  relinquished  all  of  the  cities  they 
had  held,  except  Nanking  and  Anking  on  the  Yangtze,  both 
of  which  were  besieged. 

In  the  meantime  the  British  were  demanding  the  right  to 
trade  at  Canton,  and  the  local  Governor  was  obstinately  re- 
fusing. In  October,  1856,  Admiral  Seymour  bombarded  the 
city  but  only  brought  forth  a  proclamation  calling  on  the 
people  to  exterminate  the  English.  Unfortunately  the  Brit- 
ish force  was  insufficient  to  occupy  the  city  effectively  and 
he  withdrew  and  appealed  to  London  for  reinforcements. 
Lord  Elgin  was  at  once  despatched  with  the  necessary 
force,  but  was  delayed  in  India  by  the  mutiny.  During  the 
interval  Admiral  Seymour  had  attacked  a  number  of  Chi- 
nese junks,  but  his  withdrawal  only  heartened  the  Chinese 
to  renewed  vigor.  Finally  on  Christmas  Day,  1857,  Lord 
Elgin,  who  had  finally  arrived,  despatched  an  ultimatum  to 
the  Governor  and,  after  taking  steps  to  warn  the  inhab- 
itants, stormed  and  took  Canton  and  captured  the  obstinate 
Governor  Yeh. 

Lord  Elgin  thereupon  attempted  to  open  peaceful  nego- 
tiations with  Peking  but  to  no  avail.  An  expedition 
against  the  Taku  forts  therefore  was  despatched,  and,  after 
the  capture  of  these,  Lord  Elgin  proceeded  to  Tientsin. 


24 


TRADING  WITH  ASIA 


After  much  discussion  a  treaty  was  signed  on  June  26th, 
1857,  which  provided  for  the  appointment  of  a  British  Res- 
ident Minister  at  Peking,  the  opening  of  five  additional 
ports  to  trade,  and  the  legalizing  of  the  opium  traffic. 

When  in  1859  the  British  emissary  entrusted  with  the 
exchange  of  ratification  of  this  treaty  attempted  to  reach 
Peking,  his  path  was  blocked  and  a  British  fleet  sent  against 
the  Taku  forts  was  severely  defeated  at  Peiho.    This  called 
forth  an  ultimatum  from  the  British  emissary,  Bruce,  which 
was  ignored  and  the  next  year  an  allied  French  and  British 
force  stormed  and  took  the  Taku  forts.    After  the  obstruc- 
tions at  the  mouth  of  the  Peiho  River  were  cleared  away, 
the  party  sailed  up  the  river  to  Tientsin,  where  commission- 
ers from  the  Emperor  demanded  the  terms  of  peace.    These 
were  laid  down  by  Lord  Elgin  as  first,  an  apology  for  the 
attack  at  Peiho;  second,  ratification  and  execution  of  the 
treaty  of  Tientsin ;  and,  third,  the  payment  of  an  indem- 
nity to  cover  the  cost  of  the  military  preparations.    After 
some  delay  and  much  negotiation,  including  a  great  deal  of 
treachery  and  the  actual  capture  of  two  British  envoys. 
Parks  and  Loch,  the  treaty  was  signed  with  much  ceremony 
on  October  24,  1860.    This  treaty  has  guided  China's  rela- 
tions ipth  the  West  until  the  present  time. 

Meanwhile  the  diversion  of  Imperial  troops  to  meet  the 
threatened  foreign  invasion  in  the  north  had  encouraged 
the  Taipings  to  renewed  activity  under  the  *' Faithful 
Prince.  *'  City  after  city  was  taken  until  the  whole  country 
on  the  north  side  the  Yangtze  opposite  Nanking  passed  into 
their  hands.  Hangchow  was  soon  captured  and  Sooehow 
threatened,  when  an  Imperial  attacik  on  Nanking  saved  that 
city.  At  Li  Hung-chang's  request,  an  American  named 
Ward  assembled  an  army  formed  of  Europeans,  Filipinos, 
and  Chinese  and  opposed  the  Taipings  at  Tsingpu,  but  was 
unsuccessful.  By  an  agreement  with  Admiral  Hope  of  the 
British  Navy,  the  Taipings  had  agreed  not  to  attack  Shang- 


HISTORY  OF  CHINA  AND  JAPAN  25 

hai  for  a  year,  but  on  the  expiration  of  that  time  besieged 
Shanghai.    The  allied  forces  which  had  lately  opposed  the 
Imperial  forces  near  Peking  now  attacked  their  foes  and 
drove  them  from  the  neighborhood  of  Shanghai.    Ward's 
forces,  now  known  as  the  '^Ever  Victorious  Army  ''  had 
grown  to  number  5,000,  but  in  an  attack  on  Tsuki,'  Ward 
was  fatally  wounded.    After  several  failures,  a  successor 
was  chosen  in  Major  Gordon.    Fushan  and  Changshu  fell 
easily  before  him.    After  many  vicissitudes,  during  which 
Gordon  nearly  resigned  his  command  due  to  the  parsimony 
of  Li  Hung-chang,  Sooehow  was  captured  and  a  crushing 
blow  dealt  the  Taiping  cause.    Hangchow  was  captured 
and  finally  Nanking,  the  last  stronghold  of  the  rebels,  was 
taken  together  with  the  Faithful  Prince,  who,  with  the  heir 
of  the  already  self-poisoned  ''Heavenly  King"  (the  high 
sounding  title  of  the  Taiping  leader),  was  beheaded. 

TurmoU  at  the  End  of  the  19th  Century  in  China  — 
The  period  between  1860  and  1894  was  marked  by  a  series  of 
rebellions,  massacres,  and  local  disorders,  with  which  the 
unorganized  administration  of  the  Manchus  was  only  par- 
tially  able  to  cope.    It  was  during  this  period  that  the 
French,  m  1884,  after  a  military  campaign  in  Cochin-China, 
established  a  protectorate  over  the  country  south  of  Tong- 
kmg.    In  their  relations  with  the  foreigners,  the  Chinese 
continued  to  assume  the  same  supercilious  hauteur  and 
practice  the  same  deception  and  deceit  which  experience 
should  have  taught  them  was  in  the  long  run  of  little  avail, 
ihis  attitude  was  assumed  by  the  Manchus  largely  as  a 
matter  of  self-preservation,  for  by  fostering  the  myth  that 
the  foreign  ambassadors  were  tribute  bearers,  their  hold 
upon  the  Chinese  was  strengthened.     It  was  during  the 
later  years  of  the  Taiping  rebellion  that  the  collection  of 
the  Shanghai  customs  was  placed  under  the  control  of  three 
foreign  officials,  and  a  few  years  later  the  entire  custom 
administration  was  by  treaty  placed  under  a  British  Direc- 


26 


TRADING  WITH  ASIA 


torate  on  the  basis  of  Great  Britain's  predominant  trade 
interests.  American  trade  had  developed  until  by  1860 
fifty  per  cent  of  the  foreign  shipping  of  Shanghai  was 
under  the  American  flag.  During  this  period  the  first  rail- 
road in  China  was  constructed  by  foreign  merchants  for  a 
distance  of  twelve  miles  between  Shanghai  and  Wusung, 
while  by  1887  extensive  telegraph  lines  had  been  estabUshed 
throughout  the  Empire. 

In  1894  the  King  of  Korea  appealed  to  Peking  for  help  in 
putting  down  a  rebellion  in  his  domains.    Without  consult- 
ing Japan,  whose  relations  with  Korea  were  equally  inti- 
mate, China  landed  troops  on  Korean  soil.     The  Japanese 
likewise  despatched  troops  and,  although  hostilities  did  not 
immediately  break  out,  the  Chinese  insisted  upon  Japan's 
entire  withdrawal,  which  was  agreed  to  by  the  Japanese  on 
condition  that  no  further  Chinese  troops  be  sent.     China 
failed  to  live  up  to  this  agreement  and  war  was  declared 
by  both  sides.     The  first  battle  of  Asan  in  southwest  Korea 
resulted  in  the  rout  of  the  Chinese.    At  Pingyang  on  the 
Yalu  the  Chinese  were  reinforced  by  Manchurian  troops, 
but  the  city  was  taken  by  the  Japanese,  and  in  a  subsequent 
naval  battle  on  the  Yalu  River  the  Chinese  were  defeated. 
The  Chinese  were  pursued  across  Manchuria,  defeated  at 
Hushan,  and  concentrated  upon  the  defense  of  Port  Arthur. 
This  was  captured  by  the  Japanese  who  continued  their  vic- 
torious march  axjross  Manchuria.    Peking  now  sued  for 
peace  and  by  the  terms  of  the  treaty  of  1895  Japan  exacted 
recognition  of  her  equality  with  Western  nations  in  China 
and  the  independence  of  Korea.     As  indemnity,  the  Island 
of  Formosa,   the  Liaotung   Peninsula  surrounding   Port 
Arthur,  and  two  hundred  million  taels  were  exacted.    Upon 
joint  representation  of  Germany,  France,  and  Russia,  how- 
ever, Japan  waived  her  claims  to  Liaotung  upon  payment 
of  an  additional  thirty  million  taels. 
After  the  China-Japanese  war  the  break-up  of  China  was 


HISTORY  OF  CHINA  AND  JAPAN 


27 


generally  expected  by  European  powers.     Each,  therefore, 
determined  to  seize  the  most  advantageous  ports  possible  for 
trading  purpose  and  in  1897  Germany,  as  compensation  for 
the  murder  of  two  missionaries,  secured  a  lease  to  the  har- 
bor and  port  of  Kiaochow  and  certain  economic  privileges 
including  the  building  of  a  railroad  and  the  working  of 
certain  mines  in  Shantung  Province.    Russia  exacted  a 
similar  lease  of  Port  Arthur,  which  had  so  lately  been  with- 
held from  Japan,  while  Great  Britain  leased  Weiheiwai  on 
the  opposite  side  of  Shantung  from  Kiaochow  and  France 
secured  Kwangchow  in  the  extreme  south.    Aroused  by 
these  encroachments  and  determined  to  remove  the  cause 
which  was  ostensibly  the  inability  of  China  to  rule  her  own 
domains,  the  Emperor  Kwang-su  published  in  1898  his 
famous  reform  edicts,  providing  for  modem  education,  the 
building  of  railways,  and  a  general  program  of  Western 
development.     The  reactionaries  opposed  this  plan,  how- 
ever, and  the  Emperor  lost  his  power  and  his  plans  were 
nullified. 

The  reactionary  program  now  rapidly  developed  and  took 
definite  form  in  the  Boxer  uprising,  which,  though  really 
aimed  at  the  Manchus,  was  skillfully  diverted  by  them  to 
the  ^^foreign  devils."  Peking  was  besieged,  the  German 
minister  Von  Kettler  and  several  other  foreigners  were 
murdered,  and  upon  relief  of  the  foreign  legations  by  an 
allied  force  in  the  summer  of  1900  an  indemnity  of  333 
million  dollars  was  exacted  by  the  foreign  powers.  It  was 
due  to  the  efforts  of  the  American  Secretary  of  State,  John 
Hay,  that  the  inability  of  China  to  pay  this  huge  sum  did 
not  result  in  the  partition  of  China  at  this  time.  By  a  cir- 
cular note  to  the  powers  he  elicited  their  support  to  an 
*^open  door''  policy  of  equal  opportunity  and  this  policy 
with  some  variations,  holds  China  intact  to-day. 

The  Eusso-Japanese  War.— In  the  meantime  Russian  a^^- 
gression  on  South  Manchuria  had  precipitated  the  Russ^- 


ti 


28 


TRADING  WITH  ASIA 


Japanese  war  in  1904-^,  Japan  not  being  willing  to  permit 
Russian  influence  to  encroach  upon  Korea.  By  the  terms 
of  the  treaty  of  Portsmouth,  New  Hampshire,  Japan  suc- 
ceeded to  Russia's  lease  on  Port  Arthur  and  the  Liaotung 
Peninsula  and  this  was  further  strengthened  by  the  famous 
*' twenty-one  demands''  of  1915  whereby  China  agreed  to 
an  extension  of  this  lease  from  1923  for  a  period  of  ninety 
years,  including:  the  leases  of  the  South  Manchurian  and 
Antung  Mukden  Railways,  as  well  as  important  concessions 
to  Japanese  subjects  in  Manchuria  and  eastern  inner  Mon- 
golia. 

The  Fall  of  the  Manchus.— On  October  10,  1911,  the 
Manchu  regime,  its  usefulness  long  outlived,  was  over- 
thrown and  a  republic  established.  Thus  ended  the  rule 
of  the  dynasty  which  had  so  blindly  sought,  by  all  the  Ori- 
ental diplomacy  at  its  command,  to  stay  the  hand  of  prog- 
ress. Unwilling  to  learn  by  experience,  and  maintaining  an 
impossible  attitude  toward  the  West  until  the  very  end,  this 
regime,  itself  foreign  to  the  Chinese  people,  imposed'  use- 
less and  unnecessary  suffering  upon  the  Chinese,  deprived 
them  of  a  Western  enlightenment  which  would  have  placed 
them  abreast  of  Japan  as  an  enlightened  state  and  in  the 
last  analysis  contributed  nothing  to  the  sum  total  of  human 
usefulness  and  knowledge.  Had  China,  or  the  Manchus, 
in  1842,  or  in  1860,  read  the  handwriting  on  the  wall,  and 
entered  upon  the  course  adopted  by  Japan,  the  effects  upon 
the  civilization  of  the  Far  East  and  of  the  world  would 
have  been  far  reaching  and  potent. 

laxly  Intercourse  of  Japan  with  the  West.— Little  need 
be  said  of  the  first  unsuccessful  effort  at  foreign  intercourse 
with  Japan,  extending  from  1542  to  1640,  except  that  it 
ended  in  the  general  persecution  of  300,000  native  Chris- 
tians and  the  confining  of  foreign  trade,  which  the  Dutch 
had  inaugurated  in  1600,  to  the  single  port  of  Nagasaki. 


mSTORY  OF  CHINA  AND  JAPAN 


29 


The  large  monopolistic  profit  realized  from  this  trade  by 
the  Shogun  was  largely  influential  in  obtaining  greater  tol- 
erance for  the  missionaries  after  1603,  but  a  Japanese  emis- 
sary sent  to  Europe  brought  back  such  reports  of  religious 
strife  in  Europe  at  this  period  that  the  Shogun  lyeyasu  pub- 
lished in  1614  an  edict  banishing  all  missionaries.  After 
long  persecutions,  which  were  not  tamely  submitted  to  by 
the  Christians,  a  Christian  revolt  in  1637  resulted  in  a  gen- 
eral massacre  and  the  final  expulsion  by  1640  of  all  for- 
eigners except  the  Chinese  and  Dutch,  both  of  whom  were 
willing  to  confine  their  activities  to  trade.  Thus  Japan  re- 
mained with  but  one  small  window  looking  out  upon  the 
world  at  Naprasaki,  a  hermit  nation  until  1854. 

The  Opening  of  Japan. — The  history  of  Japan  since  1854 
has  been  one  of  continuous  growth.  The  reopening  of  the 
country  by  the  peaceful  mission  of  Perry,  led  to  the  restora- 
tion of  the  Emperor  to  the  power  which  had  been  exercised 
in  his  name  for  centuries  by  his  chief  military  representa- 
tive, or  Shogun.  The  treaty  signed  by  the  Shogun  and  the 
American  Consul-General,  Townsend  Harris,  in  1858  pro- 
vided for  diplomatic  intercourse,  residence  of  consuls  at 
open  ports,  the  right  of  Americans  to  be  tried  by  their  own 
laws  for  offenses  committed  in  Japanese  territory,  the  right 
of  Americans  to  reside  in  Tokyo  and  the  open  ports,  free- 
dom of  commerce,  except  for  a  low  ad  valorem  duty,  the 
prohibition  of  the  opium  trade,  and  the  guarantee  of  the 
same  treatment  in  other  respects  as  may  be  accorded  any 
other  nation  in  the  future.  This  last  was  the  * '  most  favored 
nation"  clause.  The  seventy-one  Japanese  emissaries,  sent 
to  Washington  in  1860  for  the  ratification  of  the  Harris 
treaty,  were  the  vanguard  of  a  host  of  students  and  others 
whom  Japan  sent  to  Europe  and  America  during  the  next 
half  century  in  an  effort  to  absorb  quickly  the  science  of  the 
West.  The  unwillingness  on  the  part  of  the  Satsuma  and 
Choshu  clans  to  recognize  the  treaty  led  to  the  bombard- 


30 


TRADING  WITH  ASIA 


HISTORY  OF  CHINA  AND  JAPAN 


31 


ment  of  Shimonoseki  by  American  and  European  vessels 
and  the  collection  of  three  million  dollars  indemnity,  the 
American  share  of  which  was  returned  twenty  years  later. 
The  reaction  on  these  clans  was  complete  and  they  soon 
became  the  leaders  in  the  race  for  Western  culture. 

In  1868  the  Shogun  practically  voluntarily  turned  over 
the  temporal  power  to  the  Emperor  Mutsuhito,  who  had 
succeeded  his  father  on  the  throne  the  year  before.  This 
was  not  finally  accomplished,  however,  without  a  struggle 
between  the  followers  of  the  Shogun  and  a  few  clans  who 
were  not  satisfied  with  a  restoration  which  they  considered 
only  nominal.  The  defeat  of  the  Shogun  placed  the  Em- 
peror in  full  control. 

The  introduction  of  the  telegraph  and  railroad  soon  fol- 
lowed and  the  first  newspaper  appeared  in  1871.  Educa- 
tion along  Western  lines  was  next  inaugurated  and  in  a 
famous  rescript  the  Emperor  exhorted  his  subjects  to  study 
the  Western  civilization. 

The  Development  of  Japan  in  the  19th  Century.— 
Japan's  insistence  on  the  revision  of  the  Harris  treaty  was 
acceded  to  by  the  United  States  in  1878,  but  it  was  not  until 
the  promulgation  of  the  Constitution  and  the  election  of  the 
first  Diet  that  the  other  powers  agreed  to  treaty  revision  in 
1894.  By  1897  all  the  powers  had  revised  their  treaties 
whereby  they  surrendered  extra-territorial  jurisdiction  or 
the  right  to  try  their  own  nationals,  and  relinquished  control 
over  the  tariff,  subject  to  an  agreement  that  certain  rates 
should  remain  fixed  for  twelve  years.  In  return  Japan 
opened  the  whole  country  to  foreign  residence.  Thus  in  the 
remarkably  short  period  of  forty  years  Japan  liad  emerged 
from  absolute  seclusion  to  the  full  rank  of  a  world  power. 
Since  1880  the  merchant  marine  has  grown  under  govern- 
ment subsidy  until  in  1914  Japan  stood  sixth  in  merchant 
tonnage  with  a  total  of  1,700,000  tons.  A  thoroughly  estab- 
lished educational  system  requires  the  elementary  educa- 


tion of  every  boy  and  girl  for  six  years,  with  high  schools 
and  universities  for  those  who  wish  to  pursue  their  studies. 
The  banking  system  has  been  completely  transformed  and 
the  gold  standard  adopted,  while  the  currency  system  has 
proved  to  be  sound.  State  revenues  had  increased  sixteen 
fold  within  the  twenty  years  preceding  the  war,  but  due  to 
the  Russo-Japanese  war  and  subsequent  heavy  armaments, 
the  expenditures  have  grown  to  an  even  greater  degree, 
with  an  increasing  burden  of  taxation.  From  every  stand- 
point Japan  has  demonstrated  a  remarkable  ability  to  attain 
her  desired  goal  and  the  goal  itself  has  seemed  worthy  of 
attainment. 

Questions 

1.  Contrast  the  manner  in  which   China  and  Japan  accepted 

foreign  intercourse. 

2.  Why  were  the  first  efforts  to  open  Japan  unsuccessful? 

3.  What  methods  were  followed  by  early  missionaries  in  China 

to  spread  the  Gospel? 

4.  Describe    the    opening    of    diplomatic    intercourse    by    Lord 

McCartney.     What  were  the  results? 

5.  What  were  the  causes  of  the  First  Opium  War?    Outline  the 

terms  of  peace  and  the  date. 

6.  How  was  Japan  finally  opened  to  foreign  intercourse?      Out- 

line the  terms  of  the  Harris  treaty  and  date. 

7.  Describe  the  progress  of  Japan  since  1868. 

8.  What  were  the  principal  events  in  the  Taiping  Rebelhon? 

9.  What  was  the  cause  of  the  China- Japanese  war  in  1894? 

What  were  the  terms  of  peace? 
10.  Enumerate  the  concessions  granted  European  powers  in  1897 
and  1898.    Describe  the  causes  and  result  of  the  Boxer 
Rebellion.    What  was  the  result  of  the  Russo-Japanese 
war? 


GOVERNMENT  AND  POLITICS 


33 


CHAPTER  III 

THE    CONSTITUTIONS   AND  POLITICAL  PARTIES   OF 
CHINA  AND  JAPAN 

China 

The  End  of  the  Chinese  Empire.— The  tortuous  history 
of  Chinese  Imperial  duplicity  and  diplomacy  ended  with 
the  Manchus  in  1911.  Sudden  changes  in  dynasty  had  been 
the  rule  in  China,  where  twenty-six  changes  in  the  ruling 
family  had  occurred  in  4,000  years.  Contrasted  to  this  was 
the  Japanese  dynasty  which  it  is  claimed  has  continually 
reigned  for  2,500  years.  Chinese  philosophy  had  con- 
tributed to  the  firmly  held  belief  that  a  ruler  should  hold  the 
throne  only  so  long  as  he  governs  well,  with  the  result  that 
revolution  had  come  in  China  at  irregular  intervals  of 
about  200  years.  The  prestige  of  the  Manchus  had  never 
quite  recovered  from  the  Taiping  Rebellion,  when,  but  for 
foreign  aid,  the  rebels  would  have  defeated  the  Imperialists. 
Moreover,  the  steady  aggrression  of  the  West  could  not  be 
effectively  checked  by  the  Manchus,  who  were  unable  to 
adapt  themselves  to  the  new  conditions  and  so  only  empha- 
sized the  weakness  of  the  country.  The  failure  of  the 
Boxer  Rebellion  and  the  fixing  of  the  huge  indemnity  of 
$333,000,000  strengthened  the  forces  conspiring  against  the 
Manchus,  especially  in  the  provinces  south  of  the  Yangtze. 
The  belated  reforms  of  the  Empress  Dowager  led  to  the 
meeting  of  the  first  National  Assembly  in  1910,  two  years 
after  her  death,  and  although  designed  to  be  merely  a  delib- 
erative body,  it  assumed  further  authority,  formulated  a 
budget,   and  demanded  the  establishment   of  a   cabinet. 

n 


After  the  Assembly  had  adjourned,  the  Imperial  Govern- 
ment established  a  cabinet,  nine  of  whose  thirteen  members 
were  Manchus  under  the  leadership  of  Prince  Ching,  a  con- 
servative and  corrupt  Manchu  of  the  royal  family  who  was 
responsible  to  the  throne  alone.  This  body  embarked  upon 
a  policy  of  further  centralizing  the  governmental  power 
and  was  opposed  by  a  newer  and  more  progressive  element 
which  demanded  provincial  autonomy,  especially  in  matters 
of  railroad  construction  and  loans.  Concessions  for  the 
construction  of  railroads  in  the  Empire  had,  after  1898, 
been  granted  England,  France,  Germany  and  Belgium  and 
these  concessions  were  only  granted  in  return  for  funds  fur- 
nished the  Peking  Government.  One  American  loan  for 
the  construction  of  a  railroad  between  Canton  and  Hankow 
had  fared  rather  badly,  the  stock  in  the  corporation  formed 
to  construct  it  being  bought  up  by  Belgian  interests  in  spite 
of  the  terms  of  the  loan  agreement  which  stipulated  that  it 
should  not  leave  American  control.  After  steps  had  been 
taken  to  regain  American  control  the  concession  was  sold 
back  to  the  Chinese  Government  and  the  railroad  remains 
unconstructed.  Meanwhile,  the  German  and  English  bank- 
ing institutions  in  China  in  1895  had  an  agreement  to  share 
equally  all  business  which  either  might  obtain.  In  1905 
France  entered  into  this  financial  alliance  and  when  three 
years  later  China  desired  a  loan  to  build  a  railroad  from 
Hankow  to  Chengtu,  the  United  States  was  admitted  into 
the  alliance  after  personal  intervention  by  President  Taft 
and  the  Four  Powers.  Loans  thus  negotiated  in  the  spring 
of  1911  were  for  the  purpose  of  building  the  Hukuang 
railways  up  the  Yangtze  and  for  currency  reform.  The 
provinces  through  which  the  Hukuang  railways  were  to 
pass,  however,  objected  strenuously  to  the  Imperial  scheme 
and  announced  that  they  would  build  the  railroads  within 
their  borders  for  and  by  themselves. 
The  first  warning  of  the  Revolution  came  in  the  revolt  of 


! 


34 


TRADING  WITH  ASIA 


the  province  of  Szechuen  and  while  first  Manchu  and  later 
Chinese  officials  were  being  hurried  thither  to  pacify  the 
people  a  bomb  exploded  by  accident  in  the  Russian  conces- 
sion at  Hankow  disclosing  a  widespread  revolutionary  plot. 
This  had  been  timed  for  the  next  year  but  the  accidental 
discovery  caused  the  Revolution  to  take  place  six  months 
ahead  of  time.    Local  forces  seized  Hankow  and  Wuchang 
and  the  Viceroy  became  a  fugitive.     The  leaders  in  the  re- 
volt were  Sun  Yat-sen  and  Huang  Hsing,  both  of  whom  had 
been  exiles  and  had  formed  societies  and  collected  funds 
from  Chinese  abroad  for  years.    The  Manchus  now  rein- 
stated one  of  their  ablest  Chinese  officials,  Yuan  Shi-kai, 
whom  they  had  dismissed  in  1909  and  gave  liim  complete 
authority  to  put  down  the  rebellion.    Within  two  months 
the  rebels  had  taken  the  strategic  city  of  Nanking  and  Yuan 
Shi-kai,  foreseeing  a  long  and  expensive  civil  war,  responded 
to  the  invitation  of  Dr.  Wu  Ting-fang,  twice  Minister  to  the 
United  States  and  now  rebel  leader,  for  an  armistice  and  a 
discussion  of  peace  terms.    Meanwhile,  Dr.  Sun  Yat-sen 
had  arrived  in  China  and  had  been  made  President  of  the 
Southern  Confederacy  and  the  arrangement  now  agreed 
upon  was  that  the  Manchus  should  abdicate  in  favor  of 
Yuan  Shi-kai  and  Sun  Yat-sen  should  turn  over  his  power 
to  the  latter,  who  was  to  act  as  Provisional  President  until 
a  regular  government  was  established.     The  revolution  was 
primarily  negative  and  aimed  against  the  Manchus  and  only 
succeeded  in  making  China  a  republic  because  of  the  deep 
hostility  toward  the  monarchy  and  a  desire  to  establish  an 
entirely  different  form  of  government. 

The  Structure  of  the  Chineie  Imperial  Government.^ 
The  Imperial  Government  which  was  thus  overthrown  was 
one  of  the  most  ancient  known  to  recorded  history.  The 
Duke  of  Chou,  on  founding  the  Chou  Dynasty  3,000  years 
before,  had  revised  and  codified  the  laws  which  formed  the 
basis  of  the  system  of  government  down  to  the  Revolution. 


GOVERNMENT  AND  POLITICS 


35 


Thirteen  hundred  years  later  feudalism  had  been  abolished 
and  the  government  greatly  centralized,  but  until  the  period 
of  foreign  intercourse  there  were  few  if  any  changes  in  the 
form  of  government.     During  the  fifty  years  between  1861 
and  1911  most  of  these  changes  took  place  and  the  govern- 
ment which  was  overthrown  in  1911  was  largely  the  result 
of  an  unsuccessful  attempt  on  the  part  of  the  Manchus  to 
meet  foreign  conditions.     In  1860  the  Emperor  stood  at  the 
head  as  an  absolute  monarch,  surrounded  by  an  imperial 
clan.    The  Grand  Secretariat  and  the  Grand  Council  were 
directly  responsible  to  the  Emperor  for  administration  and 
these  functioned  through  six  boards  or  departments,  which 
corresponded  somewhat  with  modem  ministries  abroad  in 
their  range   and  scope   of  administrative   duties.     Under 
these  departments  were  bureaus  and  this  constituted  the 
central  or  Peking  Government.     Each  of  the  eighteen  prov- 
inces of  what  was  known  as  the  Middle  Kingdom  was  ruled 
by  a  Viceroy,  or  Governor,  appointed  by  the  Emperor,  un- 
der whom  were  provincial  treasurers  and  provincial  judges 
as  well  as  numerous  salt  controllers  and  grain  intendants  in 
certain  areas.    After  the  Manchu  conquest,  they  established 
garrisons  in  twelve  provinces  over  which  they  placed  Tartar- 
generals,  or  generalissimos.     These  military  officials  were 
always  Manchus,  ranking  the  civil  Viceroy,  and  they  consti- 
tuted a  very  effective  check  upon  his  authority.     The  prov- 
inces were  divided  into   taos,  or  circuits,  over   each   of 
which  was  a  taotai,  or  intendant.    These  taos  were  in  turn 
divided  into  fus,  or  prefectures,  over  each  of  which  was  a 
prefect.    There  were  also  in  this  grade  independent  chows 
and  tings  who  reported  directly  to  the  provincial  authori- 
ties.    The  lowest  administrative  areas  were  hsiens,  corre- 
sponding to   American   counties,   over  which  magistrates 
presided  and  reported  to  intermediate  officials.     There  were 
also  dependent  chows  and  tings  who  reported  to  intermedi- 
ate officials  instead  of  directly  to  the  provincial  authori- 


36 


TRADING  WITH  ASIA 


GOVERNMENT  AND  POLITICS 


ties.  All  of  these  officials  were  appointed  theoretically  by 
the  Emperor,  but  in  practice  the  recommendations  of  the 
superior  provincial  officials  were  nearly  always  accepted. 
This  organization  extended  only  to  the  eighteen  Prov- 
inces. Manchuria  was  organized  somewhat  like  China 
proper  while  Mongolia  had  a  separate  and  independent  or- 
ganization subject  to  a  Mongolian  Superintendent  with 
headquarters  at  Peking.  Eastern  Turkestan  was  a  depend- 
ency of  the  Viceroy  of  Kansu  and  Shensi  Provinces.  Tibet 
was  divided  into  two  parts,  one  ruled  by  the  Viceroy  of 
Szechuan  Province,  and  the  other  under  a  special  district 
Governor  who  resided  at  Siningfu  in  Kansu  Province. 

In  1861  a  foreign  office,  or  Tsung-li  Yamen,  was  added 
to  the  original  six  boards  of  Civil  Appointment,  Revenue, 
Ceremonies,  War,  Justice,  and  Works.    This  department 
was  abolished  in  1901  when  the  Wai-wupu,  or  Board  of 
Foreign  Affairs,  was  established.    In  1903  a  Board  of  Com- 
merce and  a  Board  of  Education  were  added.    In  1906, 
after  the  return  of  the  Imperial  Commission  sent  abroad  to 
study  foreign  governments,  a  Board  of  Posts  and  Communi- 
cations was  added  and  the  Board  of  War  reorganized  as  a 
Board  of  Military  Affairs.    A  Board  of  Dependencies  and  a 
Board  of  Navy  were  next  added,  making  twelve  Ministries 
in  all  in  existence  in  1911.    Meanwhile  the  Grand  Council 
had  superseded  gradually  the  Grand  Secretariat  and  the 
latter  had  assumed  a  more  formal  and  honorific  importance. 
The  Grand  Council,  on  the  other  hand,  assumed  the  function 
of  Privy  Council,  Imperial  Chancery,  and  Court  of  Appeals. 
It  was  composed  usually  of  six  heads  of  Boards  and  a  num- 
ber of  Secretaries.     In  1906  it  was  designated  Privy  Coun- 
cil.     In  1907  an  Advisory  Council,  including  all  memberg 
of  the  Grand  Secretariat,  the  Grand  Council,  and  the  heads 
of  all  Boards,  was  created,  but  in  1911  these  three  councils 
were  abolished  and  a  new  Privy  Council  was  formed.    The 
Boards  became  Ministries  and  their  heads  the  Cabintt. 


37 


The  National  Assembly  of  1910.— The  National  Assembly 
which  the  edict  of  August  27,  1908,  promised  to  convene  in 
the  ninth  year  from  that  date,  was  hurried  in  its  organiza- 
tion by  the  death  of  the  Empress  Dowager,  who  was  the 
leader  of  the  reactionaries  and  it  actually  convened  October 
3,  1910,  at  Peking.  It  consisted  of  200  members  divided 
into  eight  classes,  one  hundred  being  appointed  from  the 
newly  created  provincial  assemblies. 

The  Emperor,  although  absolute  and  ruling  by  divine 
right,  was  under  obligations  imposed  by  Confucian  and 
Mencian  philosophy  to  govern  justly  before  the  people  who 
were  obliged  to  reciprocate  by  obeying  loyally.    The  pe- 
culiar Chinese  institution  of  the  Censorate  helped  to  accent- 
uate this  relation.     This  body,  consisting  of  two  presidents, 
twenty-four  supervisors,  and  fifty-six  censors,  was  supposed 
to  be  the  eyes  and  ears  of  the  Emperor  and  reflected  public 
opinion  for  the  benefit  of  the  Court.    The  officers  composing 
this  body  were  also  privileged  to  watch  and  criticize  officials 
and  even  the  Emperor  himself.     They  naturally  held  an 
important  place  in  the  scheme  of  government.     In  actual 
practice  the  Emperor,  being  by  custom  closely  confined  to 
the  precincts  of  the  palace,  was  largely  influenced  by  his 
immediate  personal  following.    His  every  word  and  act  was 
recorded  and  this  served  as  a  check  against  ill  advised  use 
of  power.    Although  all  appointments  were  made  by  the 
Emperor,  most  of  the  officials  under  the  old  regime  were 
holders  of  degrees  obtained  purely  for  excellence  in  literary 
composition.     Official  positions  were  also  frequently  pur- 
chased.    This  purely  literary  examination  was  abolished  in 
1905  and  an  examination  of  officials  in  modem  and  practical 
subjects  replaced  it. 

The  Provinces  and  Duties  of  the  Officials.— The  author- 
ity of  the  fourteen  governors  and  eight  viceroys— distin- 
guished from  the  governors  in  that  they  ruled  over  two 
provinces— was  very  broad.    As  long  as  they  paid  a  certain 


I  \\l 


38 


TRADING  WITH  ASIA 


specified  sum  as  tribute,  which  they  in  turn  collected  from 
the  people  as  taxes,  and  followed  the  general  policy  of  the 
administration,  they  were  left  free  to  administer  their  own 
affairs  in  detail.  Thus  the  character  of  the  individual  and 
the  distance  of  his  province  from  Peking  were  often  deter- 
mining factors  in  the  amount  of  independent  authority  he 
wielded.  Some  of  these  rulers  organized  their  own  armies 
and  conducted  negotiations  with  foreigners.  With  all  of 
the  authority  given  them,  there  was  nothing  to  compel  them 
to  cooperate  with  Peking  for  the  common  weal.  This, 
more  than  any  other  factor,  has  accounted  for  the  lack  of 
such  practical,  cooperative  work  as  river  conservancy,  the 
lack  of  which  alone  has  caused  the  flooding  and  destruction 
by  erosion  of  vast  areas  of  rich  agricutural  land.  Com- 
pared with  American  institutions,  the  province  was  a  more 
independent  and  more  widely  separated  administrative  area 
than  one  of  our  states ;  it  more  closely  resembled  a  territory. 
The  duties  of  the  Hsien,  or  prefectural  magistrate,  were 
manifold  and  exacting.  Though  assisted  by  many  secre- 
taries, collectors,  clerks,  sheriffs,  etc.,  the  district  magistrate 
was  personally  responsible  for  every  governmental  function. 
He  was  the  court  in  civil  cases  and  in  some  criminal  cases ; 
he  was  tax  collector;  registrar  of  land;  famine  commis- 
sioner; custodian  of  official  buildings,  temples,  walls, 
prisons,  bridges,  roads,  and  schools;  he  was  postmaster, 
in  that  he  maintained  the  courier  service ;  and  in  short  he 
was  the  connecting  link  between  the  prince  and  the  peasant. 
The  town  and  village  organizations  under  him  were  nothing 
more  than  enlarged  family  groups  which  were  practically 
self-governing,  and  in  these  institutions  the  essential  democ- 
racy of  the  people  was  retained  through  centuries  of  auto- 
cratic rule.  This  loosely  knit  governmental  organization 
sufficed  as  long  as  China  was  isolated,  but  contact  with  the 
foreigner  brought  the  necessity  of  a  central  government, 
controlling  the  provinces  and  their  people  and  uniting  them 


GOVERNMENT  AND  POLITICS 


39 


for  common  defense  against  Western  aggression.  Then  the 
inherent  weakness  of  the  situation  became  apparent  and  a 
belated  attempt  to  centralize  authority  only  precipitated 
revolution. 

The  Provisional  Government  of  1912.— When  in  Feb- 
ruary, 1912,  Yuan  Shi-kai  was  unanimously  elected  Pro- 
visional President  by  the  National  Assembly  at  Nanking,  a 
Provisional  Constitution  was  also  adopted.    This  instru- 
ment placed  many  restrictions  upon  the  President  against 
his  wishes  and  resulted  in  a  conflict  between  the  executive 
and  the  legislature,  which  lasted  for  two  years  and  resulted 
in  the  dissolution  of  the  opposing  Assembly,  in  which  south- 
ern sympathizers  were  predominant.     Before  this  occurred, 
however,  Yuan  had  been  immeasurably  strengthened  by  the 
$25,000,000  reorganization  loan  which  was  concluded  with 
the  bankers  of  England,  Germany,  France,  Russia,  and 
Japan,  the  United  States  group,  upon  the  pronouncement  of 
President  Wilson,  having  withdrawn.    Strengthened  by  this 
outside  aid  in  his  fight  against  the  southern  leaders,  who 
were  now  conspiring  to  rebel,  Yuan  ordered  the  military 
governor  of  Kiangsi  Province  to  give  up  his  office  and  sent 
troops   into    that    Province    who    met    armed    opposition. 
Huang  Hsing  and  Sun  Yat-sen  denounced  Yuan  as  a  traitor 
to  the  republican  cause  and  organized  a  force  with  which 
to  punish  the  Provisional  President.    But  the  rebellion  was 
premature  and  badly  staged  and  when  Yuan's  general  took 
Nanking  the  rebellion  collapsed.     The  leader  took  refuge  in 
Japan  and  began  to  plan  a  third  rebellion.     The  question 
of  whether  a  permanent  President  should  be  chosen  before 
the   adoption   of  a   constitution   had   already  become  an 
issue,  the  northerners  contending  that  the  first  thing  to  do 
was  to  choose  a  President  and  the  southerners  maintaining 
that  the  President's  office  must  be  created  by  and  his  duties 
defined  in  the  constitution.     In  October,  1913,  the  Presi- 
dent 's  supporters,  by  a  coalition  with  one  of  the  minor  par- 


40 


TRADING  WITH  ASIA 


ties  in  the  Assembly,  succeeded  in  passing  the  Election  law, 
which  provided  that  the  President  should  be  elected  by  the 
National  Assembly  by  a  two-thirds  majority  of  a  three- 
fourths  quorum  for  a  period  of  five  years  and  should  be 
ineligible  for  two  successive  terms.     This  law  was  to  remain 
in  force  until  the  adoption  of  a  constitution.     On  October  6, 
Yuan  Shi-kai  was  elected  President  and  the  next  day  Li 
Yuan-hung,    Vice-President,    and   the   Chinese    Republic, 
which  had  already  been  recognized  by  the  United  States' 
was  promptly  recognized  by  Japan  and  the  European  pow- 
ers.    The  Kwo  Ming  party,  which  had  consistently  sought 
to  tie  the  hands  of  the  Executive,  now  submitted  a  draft  of 
a  constitution  which  was  extremely  obnoxious  to  Yuan. 
The  theory  of  the  drafted  constitution  was  that  of  a  cabinet 
government,  modeled  on  the  French  Government,  but  avoid- 
ing the  French  centralization.    Yuan  appealed  to  the  coun- 
try for  a  decision  and  in  return  received  a  flood  of  tele- 
grams denouncing  the  drafted  constitution.    Assured  of  the 
strength  of  his  position,  Yuan  on  November  4th  declared 
the  Kwo  Ming  party  members  expelled  from  the  Assembly, 
which,  thus  lacking  a  quorum,  became  incapable  of  action,' 
and  Yuan  became  the  Government  to  all  intents  and  pur- 
poses.    The  dissolution  of  the  National  Assembly  as  well  as 
that  of  the  provincial  assemblies  now  followed  and  the  Pres- 
ident, advised  only  by  an  administrative  conference  which 
he  had  called  together,  ruled  alone. 

The  Administrative  Conference  of  1913-14.— With  the 
Assembly  disposed  of.  Yuan  proceeded  to  put  into  effect  his 
own  ideas  of  a  constitution,  and  a  draft  prepared  by  Profes- 
sor Goodnow  of  Johns  Hopkins  University,  who  had  become 
constitutional  adviser,  was  circulated  throughout  the  coun- 
try. This  provided  for  a  gradual  evolution  into  a  parlia- 
mentary system.  The  Administrative  Conference  called 
together  at  the  end  of  1913  had  been  requested  to  render 
advice  on  the  matter  of  formally  dissolving  the  Assembly 


(' 


GOVERNMENT  AND  POLITICS  41 

and  the  creation  of  a  special  conference  to  amend  the  pro- 
visional constitution.    This  conference  continued  to  func- 
tion until  June,  1914,  when  a  Council  of  State  was  created 
to  supersede  it.    The  conference  upheld  the  dissolution  of 
the  Assembly  as  the  only  way  to  end  an  ^incompetent  and 
obstructionistic-  legislature  which  had  squandered  millions 
of  dollars.    The  Conference  also  advised  Yuan  to  take  steps 
to  revise  the  provisional  constitution,  rather  than  draft  a 
new  one.     A  constitutional  compact  conference  was  elected, 
therefore,  by  a  qualified  suffrage  and  proceeded  in  March 
1914,  to  make  such  changes  in  the  Provisional  Constitution 
as  the  President  considered  necessary  to  relieve  his  embar- 
rassment.    These  changes  released  the  President  from  sub- 
jection to  the  Assembly;  made  Cabinet  members  dependent 
on  the  President ;  and  gave  him  power  to  issue  urgent  orders 
to  deal  efficiently  with  financial  questions.    The  problem  of 
ultimately  drafting  a  constitution  was  also  to  be  kept  in 
mind.    A  revised  provisional  constitution  along  these  lines 
was  submitted  and  promulgated  on  May  1,  1914     In  ad 
dition  to  the  changes  outlined,  it  provided  for'  a  single 
House  in  the  Assembly,  and  gave  the  President  the  right 
with  the  consent  of  the  Council  of  State  when  the  Assembly 
was  not  m  session,  to  make  treaties,  to  make  war  and  peace 
to  confer  titles  of  nobility,  to  grant  amnesties  and  par- 
dons, and  to  refuse  to  promulgate  an  act  of  the  Assembly 
even  though  twice  passed.    The  Council  of  State  was  to 
consist  of  70  members  appointed  by  the  President,  with  the 
Vice-President  as  speaker.    It  was  to  rule  on  doubtful 
points  m  the  provisional  constitution,  and  to  act  as  a  special 

sembled  the  early  United  States  Senate. 

m  J^e,  1914,  was  to  pass  on  a  new  presidential  election  law 
presented  by  the  President  and  made  necessary  by  Z 
changes  m  the  Constitution  which  had  combined  both  houses 


M 


I 


43 


TRADING  WITH  ASIA 


1 


of  Parliament  into  one,  and  eliminated  the  Premier  as  a 
successor  to  the  President  in  event  of  his  and  the  Vice- 
President's  incapacity.     The  new  law,  promulgated  Decem- 
ber 26, 1914,  provided  that  male  citizens  40  years  of  age  and 
of  20  years'  residence  should  be  eligible  for  the  Presidency 
for  a  term  of  ten  years,  subject  to  extension  at  the  discretion 
of  the  Council  of  State,  and  should  be  elected  from  three 
candidates  nominated  by  the  former  President  by  an  elec- 
toral college  of  100  members,  half  from  the  Council  of  State, 
and  half  from  the  Legislative.    This  law  was  defended  on 
the  plea  of  the  necessity,  in  the  early  stages  of  development, 
for  a  continuity  of  policy  which  could  only  be  had  by  the 
President  nominating  his  successor.     The  organization  of 
the  new  legislature  was  next  considered  by  the  conference, 
and  these  regulations,  issued  in  March,  1915,  provided  for 
a  House  of  275  members,  with  a  term  of  four  years,  forty  to 
be  elected  from  the  central  electoral  college,  202  from  the 
provincial  electoral  colleges,  apportioned  according  to  popu- 
lation, nine  from  special  administrative  districts,  sixteen 
from  Mongolia,  six  from  Tibet,  and  two  from  Shanghai. 
One  session  each  year  shall  extend  from  September  1  to 
December  31,  with  extension  by  the  President  for  not  more 
than  two  months.     Ministers  of  State  have  a  right  to  attend 
the  sessions  and  speak.    The  qualification  for  a  voter  is 
that  he  own  $10,000  worth  of  property  in  Peking  or  $5,000 
worth  in  the  provinces,  or  that  he  has  rendered  meritorious 
service,  or  is  a  high  official,  or  recognized  scholar,  or  gradu- 
ate of  a  college,  or  teacher  in  a  college.     The  qualifications 
for  candidates  were  the  same  except  the  $30,000  and  $10,000 
qualification   in   Peking   and   the   provinces,   respectively. 
These  qualifications  are  peculiar  to  China  and  are  designed 
to  suit  the  stage  of  political  development  which  China  had 
attained,  rather  than  to  follow  blindly  the  standards  set 
up  by  Western  nations  more  advanced  in  the  art  of  self- 
government.    After  providing  for  the  organization  of  a 


GOVERNMENT  AND  POLITICS 


43 


National  Constitutional  Convention  to  meet  the  next  year  to 
draft  a  permanent  constitution,  the  Constitutional  Compact 
Conference  was  adjourned. 

The  Growth  of  Chinese  Political  Parties.— Until  1912 
there  had  been  no  organization  in  China  calling  itself  a  po- 
litical party.    A  number  of  political  associations  had  existed 
since  1898,  some  planning  reform  and  others  revolution, 
and  before  that  there  had  been  many  secret  societies.     One 
of  these,  the  Tung-meng  Hui  (Alliance  Society),  had  been 
organized  as  openly  in  favor  of  revolution.    It  had  head- 
quarters in  Japan,  and  Dr.  Sun  Yat-sen  was  its  leader. 
After  the  compromise  which  led  to  Sun  Yat-sen 's  resigna- 
tion, this  society  became  a  political  party  in  1912,  almost 
entirely  southern  in  its  composition  and  character.    Five 
of  its  members  were  appointed  to  Yuan's  first  cabinet,  in- 
cluding the  premier.     Yuan's  determination  to  overshadow 
the  Cabinet  led  to  their  resignation  in  June,  1912,  and  from 
that  time  the  rupture  between  this  party  and  Yuan  and  his 
successors  has  been  complete.     The  formation  of  several 
conservative    parties    followed    in    quick    succession,    in- 
cluding    one     less     radical     formed     by     the     military 
Governor  of  Yunnan  named   Tsai  Ao,   and  three  others 
formed  by  influential  citizens  in  Wuchang  and  Peking. 
These     last     three     parties     attracted     many     scholars 
and    officials    and    soon    became    amalgamated    into    the 
Kung-ho  Tang  (Republican  Party)  and  became  the  sup- 
porters of  the  President.     The  strength  of  this  new  con- 
servative  party  just  about  balanced  that  of  the  southern 
party,  or  Tung-meng  Hui,  and  the  Tsai  Ao  party,  there- 
fore held  the  balance  of  power  in  the  Assembly  for  some 
months  until  its  members  split  and  joined  the  two  major 
parties.    Another    party,    the    Tung-yi    Tang    (Coalition 
Party)  was  formed  in  March,  1912,  as  an  offspring  of  the 
Tung-meng  Hui,  while  at  the  same  time  the  Ming-chu  Tang 
(Democratic  Party)  sprang  up  as  the  advocate  of  a  strong 


u 


TRADING  WITH  ASIA 


I 


centralized  government.  In  August,  1912,  the  amalgama- 
tion of  several  smaller  radical  parties  with  the  Tung-meng 
Hui  brought  about  the  formation  of  a  new  Nationalist 
Party,  the  Kwo-ming  Tang,  which  was  thoroughly  organized 
with  a  declared  policy  to  maintain  the  union  of  north  and 
south,  to  develop  local  government,  and  to  encourage  the 
adoption  of  socialistic  principles.  This  strengthening  of  its 
chief  opponent  led  the  Kung-ho  Tang,  or  Republican 
Party,  to  organize  more  formally  and  it  became  the  back- 
bone of  opposition  to  the  Kwo-ming  Tang  by  amalgamation 
with  the  Tung-yi  and  Ming  Chu  under  the  name  of  the 
Chin-pu  Tang,  or  Progressive  Party,  continuing  to  support 
the  President.  China,  however,  is  not  ready  for  party  gov- 
ernment, nor  is  any  party  qualified  to  assume  such  respon- 
sibility. 

The  Movement  to  Restore  the  Monarchy. — In  May, 
1915,  the  famous  twenty-one  demands  were  made  by  Japan 
and  these  will  be  discussed  in  detail  later.  Suffice  to  say 
they  left  the  one-man  government  of  Yuan  Shi-kai  deplor- 
ably weak  and  steps  were  immediately  taken  to  call  the 
Constitutional  Convention  and  elect  a  new  National  Assem- 
bly. At  this  juncture  the  movement  to  restore  the  mon- 
archy under  Yuan  as  Emperor  began.  The  authorship  of 
the  movement  is  variously  attributed  to  Yuan  himself  and 
to  those  conservatives  who  were  fearful  that  unless  a  strong 
government  were  quickly  set  up  disintegration  would  re- 
sult. To  whatever  source  the  movement  may  be  traced  it 
soon  took  definite  form  in  the  organization  of  a  **  Peace 
Planning  Society,'*  conspicuous  among  whose  charter  mem- 
bers were  close  friends  and  supporters  of  Yuan  Shi-kai. 
This  society  made  adroit  use  of  Dr.  Goodnow's  utterances 
on  the  strong  points  of  a  monarchical  government,  and  used 
Mexico  as  an  example  of  a  weak  government  under  a  re- 
public. Soon  after  this  Dr.  Goodnow  made  a  statement 
denying  the  words  attributed  to  him,  but  setting  forth  that 


GOVERNMENT  AND  POLITICS 


4S 


a  restoration  to  monarchy  would  only  be  justified  if  ac- 
cepted by  the  thinking  people  of  China  and  the  powers,  if 
the  succession  to  the  throne  were  made  indisputable,  and 
the  monarchy  were  limited  by  a  constitution,  with  provision 
for  the  development  of  a  more  popular  government.    These 
opinions  were  also  embodied  by  Dr.  Goodnow  in  a  long 
memorandum  to  President  Yuan.    Among  the  most  violent 
attacks  on  the  proposed  change  was  one  by  Liang  Chi-chao, 
the  one-time  leader  of  the  Chin-pu  Tang,  who  proclaimed 
that  the  wish  to  reform  the  conduct  of  government  by  a 
change  in  its  form  was  nonsense.    In  October,  1916,  the 
Council  of  State  decided  upon  the  election  of  citizens  to  a 
convention  to  decide  upon  the  form  of  government.    Mean- 
while the  militants  urged  Yuan  to  proclaim  a  monarchy, 
but  he  steadfastly  refused  until  he  had  heard  the  *' voice  of 
the  people.''    Just  at  this  time  the  Japanese  Charge  d 'Af- 
faires at  Peking,  backed  by  the  Russian  and  British  Min- 
ister and  supported  by  the  French,  made  representations 
to  the  President  that  in  view  of  the  unsettled  conditions  in 
the  south  consideration  of  this  question  should  perhaps  be 
postponed.     The  United  States  Government  was  now  ap- 
pealed to  but  refused  to  express  an  opinion.    The  Chinese 
Government  thanked  the  foreign  governments  for  their  in- 
terest, but  stated  that  it  was  an  internal  question  and  was 
already  before  the  people  and  could  not  be  withdrawn. 
They  likewise  guaranteed  to  maintain  order.     In  the  mean- 
time the  vote  was  being  taken  on  the  basis  of  the  electoral 
census  and  resulted  in  all  but  50  of  the  2,043  electors  de- 
claring for  a  constitutional  monarchy,  and  many  of  them 
specifying  Yuan  Shi-kai.    Yuan,  therefore,  announced  on 
December  11,  1916,  that  **in  deference  to  the  will  of  the 
people"  he  would  become  Emperor,  the  formal  coronation  to 
be  held  the  following  year  after  the  Constitutional  Conven- 
tion had  framed  a  permanent  constitution.    On  the  fol- 
lowing day  Yunnan  Province  in  the  south  had  revolted  and 


46 


TRADING  WITH  ASIA 


formed  what  was  to  be  the  nucleus  of  the  Southern  Con- 
federacy. 

The  "Twenty-one  Demands"  by  Japan.— In  the  mean- 
while, on  August  15,  1914,  Japan  had  demanded  the  with- 
drawal of  Germany  from  Kiachow,  and  meeting  with  their 
refusal  proceeded  to  expel  Germany  by  force.  Thif 
brought  the  Great  War  to  China's  door  in  a  forceful  man- 
ner,  but  as  Japan's  ultimatum  to  Germany  had  called 
specifically  for  the  delivery  of  the  leased  territory,  "with  a 
view  to  the  eventual  restoration  of  the  same  to  China,'' 
China  had  no  official  cause  to  complain.  Considerable  un- 
easiness was  felt  throughout  the  Orient,  however,  at  thi« 
time  as  to  Japan's  ultimate  intentions.  To  allay  these  sus- 
picions  Count  Okuma  declared  to  the  American  public 
"Japan  has  no  territorial  ambitions  and  hopes  to  stand  as 
the  protector  of  the  peace  of  the  Orient.  1  state  to  the 
people  of  America  that  Japan  has  no  ulterior  motive,  no 
desire  to  secure  more  territory,  no  thought  of  depriving 
China  or  other  peoples  of  anything  which  they  now  pos- 
sess." By  the  end  of  1914  the  immediate  end  of  the  war 
was  not  in  sight  and  unequalled  opportunity  presented 
itself,  in  the  preoccupation  of  the  powers  in  Europe,  for 
Japan  to  satisfy  various  territorial  and  economic  ambi- 
tions in  China.  These  ambitions  came  under  five  general 
heads,  first,  to  succeed  Germany  in  Shantung;  second,  to 
consolidate  the  Manchurian  territory  obtained  as  a  result 
of  the  Russo-Japanese  war  and  add  parts  of  inner  Mon- 
golia; third,  to  control  the  iron  output  of  China;  fourth, 
to  render  a  military  menace  to  Japan  from  the  coasts  of 
China  impossible  by  preventing  the  lease  of  any  of  China's 
ports  and  coastal  islands;  and  fifth,  to  obtaiu,  if  possible, 
such  economic,  military,  and  political  domination  over 
China  as  to  make  it  practically  a  tributary  to  Japan. 
These  five  aims  were  contained  in  the  famous  Twenty-one 
Demands  served  on  China  on  January  18,  1915.    Absolute 


GOVERNMENT  AND  POLITICS 


4f 


secrecy  was  imposed  upon  President  Yuan,  but  despite 
every  precaution,  including  official  denials  from  Japan, 
the  text  of  the  demands  became  known  and  after  much 
maneuvering  Japan  presented  an  ultimatum  on  May  7, 
demanding  immediate  acceptance  of  the  first  four  groups 
of  a  new  set  of  twenty-four  demands,  similar  to  the  old,  and 
threatening  force  if  a  favorable  answer  were  not  received. 
Groups  one  to  four  of  the  new  demands  were  consequently 
acceded  to  in  14  specific  notes  covering  briefly  the  first 
four  points  mentioned  above.^  The  fifth  group  of  seven 
articles  calculated  to  encroach  very  seriously  upon  China's 
sovereignty  and  internal  administrative  control  was  "re- 
served for  future  consideration. '  * 

Death  of  Yuan  Shi-kai  and  War  with  Germany. — This 
action  on  the  part  of  Japan  was  the  real  impetus  toward 
the  movement  to  restore  the  monarchy  under  Yuan  which 
has  already  been  outlined.     The  excuse  for  this  movement 
was  that  China  was  slowly  disintegrating  because  of  a  lack 
of  strong,  unified  control.    Despite  the  uprising  in  Yun- 
nan, the  promoters  of  the  monarchist  movement,  encour- 
aged by  the  unanimous  votes  of  the  provincial  electors  in 
favor  of  the  monarchy,  decided  to  continue  on  their  course. 
The  revolt  of  Kweichow  Province  adjoining  Yunnan  in  the 
south  now  took  place,  followed  in  March,  1917,  by  Kuangsi, 
and  within  a  month  by  Chekiang  and  Kwantung  Prov- 
inces.   Yuan  tried  in  vain  to  conciliate  the  southern  leader, 
Wu  Ting-fang,  but  the  southern  position  was  consistent 
in  demanding  that  he  resign  from  the  position  he  had  taken. 
In  May,  Szechuan  Province  revolted  and  two  days  later 
Yuan  publicly  announced  his  intention  to  retire,  but  be- 
fore he  could  carry  out  his  purpose  he  died  on  June  6, 1917. 
Vice-President  Li  Yuan-hung,  immediately  entered  upon 
the  duties  of  President  and  the  new  government  sought 

1  This  action  was  never  ratified  by  any  Chinese  Assembly  as  required 
by  the  Constitution. 


48 


TRADING  WITH  ASIA 


hi 


to  establish  a  Parliament  according  to  the  Provisional  Con- 
stitution  adopted  at  Nanking  in  1912.    The  Constitutional 
Compact  was  discarded ;  Parliament  reconvened  on  August 
1,  a  Cabinet  headed  by  Tuan  Chi-jui  as  Premier  was  formed, 
and  Feng  Kwo-chang  was   elected  Vice-President.    The 
Republic  of  China  thus  had  been  preserved.    On  September 
15,  Parliament  began  drafting  the  permanent  constitution, 
wid  for  eight  months  China  progressed  satisfactorily  as  a 
Republic.     The  action  of  the  United  States  in  severing  rela- 
tions with  Germany,  and  calling  upon  all  neutrals  to  do 
bkewise,  had  a  far  reaching  effect  upon  China,  which  had 
also  made  the  subject  of  the  sinking  of  500  Chinese  laborers 
on  a  French  transport,  and  the  indiscriminate  sinking  of 
shipping  in  general,  the  basis  for  a  note  of  protest  to  the 
German  Government.    On  March  14,  1917,  diplomatic  rela- 
tions  with  Germany  were  broken  and  on  August  14,  1917, 
China  declared  war  against  her.     This  decision  was  not 
reached,  however,  without  a  struggle  which  shook  the  new 
Republic  to  its  foundations,  and  made  indirectly  possible 
the  restoration  of  the  Manchus  for  a  brief  period.     This 
move  was  abortive,  however,  and  as  it  implicated  President 
Li,  he  having  been  captured  by  the  Manchu  leader  and 
held  prisoner  for  a  short  time,  he  resigned  on  July  17th 
in  favor  of  Vice-President  Feng,  who  had  early  repudiated 
the  Manchu  movement  and  had  become  Acting  President 
at  Nanking.     The  new  President  came  into  office  at  Peking 
on  August  1,  1917,  and  ten  days  later  war  was  declared. 
The  Lansing-Ishii  Agreement.— On  November  2,  1917, 
the  Lansing-Ishii  Agreement  between  America  and  Japan 
was  signed  at  Washington.     This  contained  two  important 
clauses,  namely,  that  the  United  States  recognized  Japan 's 
*' special  interests''  in  China,  and  that  both  countries  re- 
pledged  themselves  to  observe  the  principle  of  the  *'open 
door*'  and  territorial  integrity  of  China.    The  reasons  for 
this  agreement  were  three  in  number.    First,  the  apprehen- 


GOVERNMENT  AND  POLITICS 


49 


sion  in  America  and  the  world  regarding  Japan's  inten- 
tions in  China;  second,  Japan's  apprehensions  regarding 
America's  intentions  in  China;  and  third,  the  need  of  the 
allies  for  a  definite  understanding  with  Japan  in  view  of 
the  loss  of  Russia  from  their  ranks. 

The  Military  Agreement  of  1918.— With  the  abdication 
of  the  Czar  of  Russia  in  March,  1917,  German  penetration 
into  China  along  the  many  thousands  of  miles  of  border  was 
feared  by  China  and  the  Allies,  but  Japan  could  take  no 
steps  along  this  line  without  an  agreement  with  China.  The 
military  agreement  signed  on  May  16,  1918,  therefore,  was 
designed  to  remedy  this  situation  and  an  exchange  of  notes 
between  Chang  and  Viscount  Motono  on  March  25,  1918, 
gave  no  definite  details  regarding  the  arrangement.  These 
were  said  to  be  contained  in  twelve  articles  undertaking, 
in  brief,  to  form  a  military  alliance  between  China  and 
Japan  for  mutual  defense  against  Russia .- 

Effects  of  China's  Entrance  into  the  World  War.— An 
immediate  effect  of  China's  entrance  into  the  World  War 
was  the  temporary  suspension  of  payment  of  the  Boxer  in- 
demnity, and  an  increase  in  tariff  rates  to  an  effective  5 
per  cent,  but  the  Chinese  still  feel  that  their  full  recognition 
as  a  sovereign  power  is  the  goal  to  be  striven  for. 

The  Election  of  President  Hsu.— In  1918  the  country  was 
divided  into  a  progressive  south,  with  headquarters  at  Can- 
ton; a  conservative  north,  with  Peking  as  capital,  and  a 
neutral  zone  along  the  Yangtze  River,  of  which  Nanking  is 
the  chief  center,  but  over  which  there  was  no  definite  gov- 
ernment. Until  September,  1918,  this  territory  was  in  con- 
trol of  the  north  and  the  neutrals,  with  Tuan  Chi-jui  as 
Premier  leading  the  first  group,  and  President  Feng,  the 
second.  On  September  4th,  1918,  Hsu  Shih-chang,  the 
present  President,  was  elected  to  succeed  President  Feng,  by 

«  The  agreement  was  cancelled  by  mutual  consent  January  28,  1921. 


^n 


50 


TRADING  WITH  ASIA 


i 


a  Parliament  convened  at  Peking  on  August  14,  against 
which  the  south  protested.  This  Parliament  had  been  se- 
lected after  the  national  council,  succeeding  the  Parliament 
dissolved,  on  June  12,  1917,  had  passed  new  laws  providing 
for  its  organization  and  election.  Elections  under  these 
laws  were  held  in  the  spring  and  summer,  and  a  reduced 
membership  of  573  was  elected  as  the  five  revolting  prov- 
inces abstained  from  any  participation.  At  first  hope  was 
held  out  that  the  new  President  would  command  the  support 
of  the  south,  but  the  several  negotiations  toward  internal 
peace  have  been  unsuccessful. 

Japan 

The  Constitution  and  Political  Parties  of  Japan.— A« 

early  as  1881  the  first  step  towards  a  constitution  had  been 
taken  in  Japan,  when  an  Imperial  Edict  was  issued  prom- 
ising a  constitution  providing  for  a  national  assembly,  which 
was  to  be  called  ten  years  later.    While  this  act  had  long 
been  advocated  by  many  constitutional  societies,   it  was 
not  exactly  an  involuntary  act  on  the  part  of  the  Emperor. 
The  Restoration  Government  organized  in  1868  had  pro- 
vided for  the  creation  of  a  deliberative  assembly,  the  Gisei, 
with  Lower  House  members  chosen  by  the  Emperor,  one 
from  each  Diamiate,  who  were  empowered  to  dis<5uss  certain 
matters  under  an  Upper  House  of  Nobles.     In  1871  this 
was  replaced  by  the  Sain  or  Left  College,  also  composed 
entirely  of  Imperial  nominees,  but  with  wider  deliberative 
powers.    At  the  same  time  a  commission  sent  to  Europe 
and  America  reported  in  favor  of  a  constitutional  form  of 
government  so  adapted  as  to  provide  for  a  gradual  increase 
in  popular  government  as  the  capacity  of  the  people  in- 
creased.    In  1875,  after  the  establishment  of  a  deliberative 
assembly  of  local  authorities,  the  Sain  was  abolished  and  its 
legislative  authority  delegated  to  the  Genro  or  Elder  States- 
men, who  have  ever  since  determined  the  personnel  and 


GOVERNMENT  AND  POLITICS 


51 


policies  of  the  various  governments  and,  as  a  privy  council 
and  Imperial  mouthpiece,  are  really  the  Government  of 
Japan.    A  constitutional  Investigation  Bureau  was  estab- 
lished in  1884  with  (later  Prince)  Ito  at  its  head  and  in  the 
same  year  the  European  system  of  nobility  was  adopted,  fol- 
lowed the  next  year  by  the  establishment  of  the  cabinet 
system,  and  in  1888  by  the  Privy  Council.     On  February 
11,  1889,  the  constitution  was  promulgated.     This  instru- 
ment which  was  the  crowning  work  of  Ito's  career,  was  a 
step  toward  self-government,  and  did  not  destroy  the  Im- 
perial control  over  the  Government,  but  furnished  a  founda- 
tion on  which  popular  institutions  could  later  be  set  up. 
The  power  of  the  Emperor  is  supreme  and  is  derived  by  in- 
heritance from  divine  origins.     He  exercises  the  legislative 
power  with  the  consent  of  the  Imperial  Diet,  which  also  has 
permission  to  initiate  proposed  laws  that  may  be  withdrawn, 
however,  and  amended  by  the  crown,  aa  well  as  vetoed  ab- 
solutely.    Constitutional  amendments  may  be  proposed  by 
the  Emperor  alone.    The  session  of  the  Diet  is  limited  to 
three  months  and  during  the  remainder  of  the  year  the  ordi- 
'  nances  of  the  Emperor  have  all  the  force  of  law,  but  they 
must  not  conflict  with  law  and  must  be  approved  when  the 
Diet  assembles.    All  officials,  including  Cabinet  Ministers, 
are  appointed  by  and  responsible  to  him,  and  he  has  su- 
preme  command   of   the   military   forces,    declares   war, 
makes  peace,  and  concludes  treaties. 

Structure  and  Powers  of  the  Japanese  Diet.— The  Diet 
consists  of  a  House  of  Peers  and  a  House  of  Representa- 
tives. The  first  has  374  members  and  consists  of  princes  of 
the  blood,  nobles,  and  Imperial  nominees.  Nobles  below  the 
rank  of  marquis  are  empowered  to  elect  representatives  to 
the  Upper  House  for  a  term  of  seven  years.  Imperial  nom- 
inees consist  of  persons  rendering  exceptional  services  to 
the  State,  who  sit  for  life,  and  those  elected  one  from  each 
city  and  prefecture  from  among  the  highest  taxpayers,  who 


52 


TRADING  WITH  ASIA 


I' 

,      I: 


f 


sit  for  seven  years.  Specific  provision  is  made  that  noble 
members  shall  always  be  in  the  majority.  The  House  of 
Bepresentatives  is  composed  of  381  members  chosen  by  male 
electors  over  25  years  of  age  and  paying  at  least  $5.00  in 
direct  taxes.  Any  male  citizen  of  the  age  of  30  years  may 
become  a  candidate  for  the  Lower  House.  Under  the  pres- 
ent restriction  there  are  but  1,500,000  qualified  electors 
out  of  a  population  of  54,000,000.  The  constitution  safe- 
guards the  right  of  free  speech  to  the  members  of  the  House, 
who  hold  office  for  four  years.  The  Japanese  Lower  House 
possesses  only  a  power  of  resistance  against  what  could 
become  an  arbitrary  exercise  of  authority  by  the  Emperor 
who  still  retains  the  sovereign  rights. 

The  legislative  power  of  the  House  consists  in  the  right  to 
initiate  ordinary  laws  and  in  the  final  right  to  approve  all 
laws.    The  control  of  the  finances  of  the  Empire  is  lodged 
in  the  Diet  and  the  budget  must  be  introduced  into  the 
Lower  House.    While  the  Diet  has  control  over  taxes  and 
loans,  administrative  fees   and   charges   comprising  one* 
third  the  entire  revenue  are  beyond  the  control  of  the 
Diet.     The  same  is  true  of  expenditures  already  fixed, 
or  arising  from  the  effect  of  law,  or  those  dealing  with  the 
legal  obligations  of  the  Government.     These  comprise  the 
expenses  connected  with  the  various  departments,  the  army 
and  navy,  expenses  of  all  officials,  including  salaries  and 
pensions,  obligations  arising  from  treaties,  and  obligations 
arising  from  the  national  debt,  all  of  which  are  beyond 
the  control  of  the  Diet.     The  Government  is  carried  on  in 
case  of  the  dissolution  of  the  Diet  before  it  has  acted  on 
the  budget  by  a  provision  empowering  it  to  carry  out  the 
budget  of  the  preceding  year.     The  popular  support  of  the 
Diet,  therefore,  is  the  only  factor  which  makes  it  of  essen- 
tial  importance  in  the  financial  scheme  of  the  Government, 
which,  but  for  fear  of  popular  disapproval,  could  operate 
practically  independently. 


GOVERNMENT  AND  POLITICS 


5d 


» 


The  right  of  interpellation  of  Cabinet  Ministers  is  the 
chief  weapon  now  utilized  by  the  minority  parties,  who 
have  practically  no  other*  method  of  registering  their  interest 
in  national  affairs.  The  uncertainty  of  party  allegiance  has 
made  this  a  particularly  significant  method  of  registering 
individual  sentiment  in  lieu  of  speechmaking,  although 
there  is  no  necessity  for  a  reply  from  an  irresponsible  Cab- 
inet. When  the  Cabinet  thus  proves  obdurate  to  the  ma- 
jority in  control,  an  address  to  the  throne  is  sometimes  re- 
sorted to,  and  sublime  justice  from  the  fountainhead  of 
justice  is  consistently  expected  in  such  cases. 

With  no  real  representative  government  there  is  little 
public  debate  in  the  Diet,  and  most  of  the  real  work  is  done 
in  committees,  where  bribery  has  had  an  opportunity  to 
greatly  weaken  the  effectiveness  of  the  Lower  House,  and 
leaves  the  Upper  House  a  strong,  conservative  f^actor  in 
exerting  what  influence  the  Diet  possesses. 

The  Genro  and  the  Cabinet.— The  Genro  has  already 
been  described  as  the  real  government  of  Japan.  Its  po- 
sition is  no  less  remarkable  in  that  it  is  extra-legal.  During 
the  diffixiult  period  of  transition  since  1868  it  has  been  a 
wonderful  sustaining  force  charting  the  course  for  the 
new  nation  and — in  short — a  continuous  and  effective  con- 
trol over  cabinets  and  policies.  The  place  of  the  Cabinet  is 
simply  set  forth  in  the  provision  in  the  Constitution  that 
'* Ministers  of  State  shall  give  their  advice  to  the  Emperor 
and  be  responsible  for  it.''  The  Privy  Council  is  empow- 
ered to  deliberate,  when  consulted  by  the  Emperor,  upon 
matters  of  state.  Comprising  ex-officio  the  members  of  the 
Cabinet,  its  decisions  reflect,  theoretically,  the  will  of  that 
body,  and  the  approval  of  the  Emperor  gives  them  an  un- 
questionable sanction.  Because  of  this  peculiar  arrange- 
ment of  power,  the  Cabinet  may  escape  the  results  of  many 
of  its  acts  and  avoid  interpellation  by  incorporating  min- 
isterial  policies  with  those   of  the  Privy  Council.    The 


54 


TRADING  WITH  ASIA 


GOVERNMENT  AND  POLITICS 


55 


I 


premier  of  the  Cabinet  is  appointed  by  the  Emperor  and 
chooses  the  nine  department  heads,  who  from  expediency 
have  come  to  include  the  leaders  of  the  dominant  groups  in 
the  Lower  House,  with  the  exception  of  the  Ministers  of 
War  and  the  Navy,  who  must  be  Army  and  Navy  officers. 
These  ministers  sit  and  speak  in  either  House  and  have 
free  access  to  all  committees.  They  may  introduce,  amend, 
or  withdraw  bills,  and  these  have  precedence  over  those  of 
private  members.  The  Cabinet  may  prorogue  the  House  for 
15  days  in  order  to  concentrate  attention  upon  its  own  bills, 
and  by  this  weapon,  which  shortens  the  brief  space  allotted 
to  legislation,  its  wishes  are  often  carried  out.  Dissolution 
of  the  Diet  signifies  that  the  peoples'  representatives  are  at 
variance  with  the  Imperial  Government  and  that  the  Em- 
peror wishes  others  elected. 

The  Organization  of  the  Judiciai-y.— The  judiciary  is  or- 
ganized  according  to  law  and  the  courts  exercise  their  power 
under  the  same  sanction.  The  judiges  have  life  tenure  un- 
less dismissed  for  cause.  But  since  ^'according  to  law'* 
practically  means  ''according  to  the  wish  of  the  Govern- 
ment,'' the  legal  safeguards  surrounding  the  judiciary  in 
cases  affecting  the  official  hierarchy  have  small  force. 

The  Real  Character  of  the  Japanese  Constitution.— -The 
Japanese  Constitution  is  skillfully  drawn  to  apparently  es- 
tablish many  new  and  democratic  forms,  but  in  fact  it  re- 
tains the  old  forms.  In  this  respect  it  is  a  splendid  instru- 
ment of  transitional  reform.  This  condition  has  been  ac- 
cepted in  a  matter  of  fact  way  by  the  people  who  are  ap- 
parently content  to  leave  the  power  where  it  can  be  exercised 
with  greatest  discretion.  With  a  coming  conception  of 
greater  political  freedom,  the  manner  in  whicli  a  new  sit- 
uation, marking  the  end  of  this  transitional  period,  will  be 
met,  is  of  interest. 

The  Evolution  of  Japanese  Political  Parties.  —Emerging 
in  sixty  years  from  a  state  of  feudalism  to  the  position  of  a 


modem  state,  Japan,  whose  first  elections  for  an  Imperial 
Diet  were  held  only  26  years  ago,  presents  a  political  party 
situation  somewhat  puzzling  to  the  average  observer.     It 
must  first  be  realized,  however,  that  four  distinct  factors 
constitute  the  Government,  the  Emperor,  the  Genro,  or 
Elder  Statesmen,  the  clans,  and  the  bureaucracy.    The  offi- 
cial class  has  been  controlled  by  the  clans  through  the 
Genro,  and  while  the  Choshu  clan,  for  example,  has  gotten 
control  of  the  Army,  the  Satsuma  clan  has  succeeded  in 
dominating  the  Navy.    For  the  past  25  years  the  Genro  has 
made  and  unmade  Cabinets,  always  selecting  the  majority 
of  the  personnel  from  one  of  these  two  clans.    This  condi- 
tion explains  the   real  movements  in  Japanese  politics. 
Champions  of  representative  government  have  contended 
from  the  first  against  this  absolute  control,  and  also  against 
the  division  of  spoils,  which  has  developed  a  jealousy  be- 
tween these  two  powerful  clans  that  has  greatly  weakened 
their  power.    Finally  the  people  have  discovered  that  the 
burden  of  taxation  under  which  they  are  staggering  only 
furnishes  money  which  goes  eventually  to  one  or  both  of 
these  clans,  and  so  to  the  support  of  either  the  Army  or  the 
Navy,  and  they  are  objecting  to  heavy  expenditure  in  either. 
The  first  political  party  was  founded  in  1880  by  Itogaki 
and  was  called  the  Jiyu-to,  or  Liberal  Party,  and  was  an 
outgrowth  of  several  organizations  for  the  study  of  political 
science.     Okuma,  two  years  later,  organized  the  Kaishin-to, 
or  Reform  Party,  which  later  became  the  Shimpo-to,  or 
Progressive  Party.    This  party  stood  for  internal  reform  as 
a  necessary  precedent  to  the  obtaining  of  tariff  autonomy 
and  the  abolishment  of  the  rights  of  foreigners  to  exercise 
legal  authority  over  their  own  subjects  in  Japan.     In  the 
same  year  the  Taisei-to,  or  Imperial  Party,  was  organized 
by  Government  supporters  and  advocated  absolute  obedience 
to  the  Emperor  and  the  reforms  promised  by  the  Emperor 
with  the  Constitution.    Until  1889,  when  the  Constitution 


I 


56 


TRADING  WITH  ASIA 


went  into  effect,  these  three  parties,  the  Liberal  representing 
the  radicals  or  doctrinaires,  the  Progressive  advocating  re- 
forms, and  the  Imperialists  bent  upon  thwarting  any  move- 
ment toward  democracy,  dominated  Japanese  politics 

Count  Ito  and  Count  Okuma.-The  first  national  elec- 
tion under  the  Constitution  in  1890  returned  300  members 
divided  into  ten  groups.    The  Independents  with  sixty-nine 
members  headed  the  list.    These  ten  groups  finally  coalesced 
into  four,  the  Liberal  and  Progressive  groups  becoming  tht 
leaders,  and  these  two  parties  finally  alternated  as  the 
party  m  office  and  the  opposition  until  1900.    Meanwhile  • 
law  prohibiting  branches  of  political  parties  being  estab- 
lished  in  the  provinces  was  replaced  in  1893,  and  greatly 
strengthened  party  government  as  it  existed.    It  was  not 
until  1895  that  Count  Ito  obtained  the  first  government 
majority  in  the  House  of  Representatives  by  a  coalition  of 
the  Liberal,  Nationalist,  and  Official  parties.    By  opposing 
a  party  measure  of  this  Government  granting  more  responsi- 
bility to  the  Cabinet,  the  House  of  Peers  caused  Ito's  resig- 
nation.    After  a  short  term  of  office  in  which  he  vainly  en- 
deavored to  separate  Okuma  from  his  party,  the  Progres- 
sives, Count  Matsukata,  the  next  Premier,  resigned  and  was 
succeeded  by  his  predecessor.  Count  Ito,  who,  rejecting  the 
offers  of  the  Liberals  for  their  support  attempted  to  establish 
party  government  by  winning  over  the  Progressives,  but  this 
was  opposed  by  the  Genro  who  held  that  party  government 
was  unconstitutional.    Thus  in  1898  a  coalition  of  the  Lib- 
erals and  Progressives  resulted  in  the  formation  of  a  new 
Constitutional  Party,  which  was  charged  with  important 
duties  m  connection  with  the  going  into  effect  of  the  new 
commercial  treaties  in  1899,  and  the  resulting  necessity  for 
domestic  reforms  and  a  strengthening  of  national  ri-hts 
ind  prestige.    This  attempt  at  party  government  proved°im- 
mature  and  the  coalition  went  out  of  office  in  four  months 
Marquis  Yamagata  now  attempted  to  hold  office  with  the 


I 


GOVERNMENT  AND  POLITICS 


57 


i 


support  of  the  Liberals,  but  Count  Ito  formed  a  new  party, 
the  Seiyu-kai,  from  the  dissolved  Liberal  Party  and  took 
over  the  Government.  At  the  same  time  the  Progressive 
Party  was  reorganized  under  Count  Okuma.  Ito  now  re- 
ceived  opposition  from  the  Upper  House  which  resented 
his  having  become  a  leader  of  a  political  party,  and  he  was 
forced  to  resign.  The  Elder  Statesmen  now  decided  to  take 
no  active  part  in  the  parliamentary  Government,  but  to  rule 
through  younger  men. 

The  Ohoshu  Clan  and  Seiyu-kai  Party.-A  Choshu  fol- 
lower of  Yamagata,  named  Katsura,  was  selected  for  Pre- 
mier m  1900,  and  held  office  under  clan  protection  for 
four  and  one-half  years.    The  parties  had  now  decided  to 
cooperate  with,  rather  than  oppose,  the  clan  government  of 
the  Elder  Statesmen,  and  the  belief  that  party  government 
could  not  prevail  in  Japan  was  predominant.    During  his 
tenure  of  office  the  militaristic  program  of  the  Choshu  clans 
to  **make  Japan  the  predominant  country  in  the  Far  East" 
was  greatly  strengthened,  first,  by  the  Anglo-Japanese  al- 
liance,^ and  then  by  the  successful  war  against   Russia. 
Japan  s  preeminence  as  a  military  power  is,  therefore  in 
no  small  measure  due  to  England.     The  disappointment 
over  the  terms  of  the  Portsmouth  Treaty,  ending  the  war 
with  Russia,  led  to  Katsura 's  downfall,  and  on  his  recom- 
mendation the  Seiyu-kai  leader,  Saionji,  succeeded  him 
The  new  Premier  held  office  for  three  years  and,  although 
he  had  the  support  of  his  party  throughout,  made  no 
attempt  to  found  party  government.     In   1908   Katsura 
again  assumed  office  and  retained  the  support  of  the  Seiyu- 
kai,  principally  because  the  nation  as  a  whole  was  pleased 
with  the  Government's  Manchurian  and  Korean  policy 
In  1911  popular  feeling  against  the  Katsura  military  group 
caused  Saionji  to  again  be  summoned  to  form  a  Cabinet 

The  Kokumin-to  and  Count  Okuma.— The  year  before 
this  the  Progressives  had  formed  themselves  into  a  new 


58 


TRADING  WITH  ASIA 


party,  the  Kokumin-to  or  Constitutional  Nationalists,  also 
under  Okuma  's  guidance.     This  group  sought  to  break  up 
the  Seiyu-kai  by  advocating  some  policy  to  which  the  sev- 
eral small  independent  parties  could  rally.    Throughout 
Saionji's  second  ministry  the  question  of  finances  was  up- 
permost, the  Choshu  men  insisting  upon  creating  two  new 
divisions  of  the  Army,  or  40,000  additional  men  for  Korea, 
which  had  now  been  annexed.    Upon  the  death  of  the 
Emperor  in  1912,  a  reaction  against  the  absolute  power  of 
the  throne  was  feared  and  Katsura  was  called  upon  for  the 
third  time.    In  his  new  government  he  showed  no  signs  of 
alleviation  from  the  same  bureaucratic  principles  and  soon 
lost  the  support  of  the  two  great  parties  and  popular  con- 
fidence which  he  attempted  to  regain  by  creating  a  new 
party,  the  Rikken  Doshi-kai,  or  Constitution  Friends  So- 
ciety.   Upon  his  failure  he  was  succeeded  by  Admiral 
Yamamoto,  who,  as  a  member  of  the  opposing,  or  Satsuma, 
clan,  received  the  support  of  the  Seiyu-kai.    In  1914  dis- 
closures were  made  of  a  great  scandal  in  the  Navy,  and 
several  Japanese  naval  officers  were  indicted  in  Berlin  for 
graft.    This  lead  to  the  downfall  of  the  Yamamoto  Cabinet, 
and  Count  Okuma  was  called  from  his  retirement  to  organ- 
ize a  Cabinet.    The  policy  of  this  new  Cabinet  was  largely 
influenced  by  the  Great  War,  which  soon  broke  out  and  re- 
sulted in  the  active  participation  of  Japan  in  the  capture  of 
German  possessions  in  Shantung  and  the  resulting  twenty- 
one  demands  upon  the  Chinese  Government.    These  were 
designed  greatly  to  strengthen  Japan's  influence  in  China, 
if  not  actually  to  usurp  Chinese  sovereignty.     Such  action 
called  forth  a  vote  of  censure  by  the  Diet  which,  while  not 
carried,  was  significant  in  obtaining  a  one-third  support  of 
the  House.    This  was  followed  in  1915  by  disclosures  of 
corruption  in  the  election  held  the  previous  March  in  which 
Viscount  Oura,  the  Home  Minister,  was  implicated,  and 
Count  Okuma  offered  the  resignation  of  the  whole  Cabinet. 


GOVERNMENT  AND  POLITICS 


59 


I 


After  canvassing  the  situation  and  finding  no  other  availa- 
ble candidate  the  Elder  Statesmen  commanded  Count 
Okuma  to  remain  in  office  and  select  a  new  Cabinet.  This 
Cabinet  continued  to  struggle  with  the  popular  demands  for 
retrenchment,  and  the  military  demands  for  a  larger  Army 
and  Navy  and  finally  gave  way  in  1918  to  the  present  Pre- 
mier Hara  who,  as  leader  of  the  Seiyu-kai,  has  again  estab- 
lished a  semblance  of  party  government. 

Questions 

1.  What  is  the  fundamental  difference  between  the  Chinese  and 

Japanese  in  conception  and  form  of  government  t 

2.  OutUne  the  structure   of  the  old  Imperial  Government  of 

China. 

3.  How  did  Yuan  Shi-kai  undermine  the  power  of  the  first  As- 

sembly? 

4.  Outline  the  form  of  government  in  China  under  the  revised 

provisional  constitution. 

5.  Outline  the  growth  of  Chinese  political  parties. 

6.  What  outside  pressure  led  Yuan  to  assume  the  title  of  Em- 

peror? 

7.  What  is  the  Lansing-Ishii  Agreement? 

8.  What  is  the  form  of  the  Japanese  Government  under  the  Con- 

stitution? 

9.  Describe  the  position  and  power  of  the  Japanese  Emperor 

OftheGenro.     Of  the  Cabinet. 
10.  Outline  the  growth  of  political  parties  in  Japan. 


CHAPTER  IV 

TARIPPS,  TREATIES  AND  COMMERCIAL  LAWS  IN  CHINA  AND  JAPAN 

China 

The  outstanding  feature  of  the  treaties  which  have  been 
negotiated  between  China  and  Western  powers  is  the  grant- 
ing  to  foreign  subjects  of  the  right  of  extraterritoriality. 
The  ordinary  doctrine  of  international  law  holds  that  a  sov^ 
ereign  state  has  jurisdiction  over  the  person  and  property 
of  foreigners  within  its  confines,  but  China  has  partially 
surrendered  this  right  by  treaty  with  the  West.    Under 
these  treaties  the  person  and  property  of  the  foreigner  in 
China  does  not  come  under  Chinese  jurisdiction  at  all  but 
under  the  protection  of  his  own  flag,  and  it  is  by  his'own 
officials  that  the  foreigner  is  tried,  except  under  certain 
conditions  to  be  described  later.    By  waiving  her  rights  to 
try  foreigners  China  does  not  evade  her  respoii8ibility  to 
protect  them  and  this  obligation  is  fully  imposed  by  treaty 
Extraterritoriality  in  Ohina.-This  situation  of  responsi* 
bihty  without  right  of  trial  has  long  been  complained  of  by 
China,  who  maintains  that  it  was  forced  upon  her  against 
her  will.    While  this  contention  is  technically  just    his- 
torically and  practically  China  has  long  allowed  foreigners 
to  be  governed  according  to  their  own  laws.    This  is  due  to 
some  extent  perhaps  to  the  large  administrative  area,  and 
the  unwillingness  of  early  Chinese^  provincial  governors  to 
assume  any  responsibilities  with  reference  to  the  foreigners, 
or  to  have  any  intercourse  with  them  except   trade  for 
profit.    As  early  as  the  ninth  century  the   Arabs   were 
granted  extraterritorial  rights  at  Canton,  and  in  the  six- 
teenth  century  the  Portuguese  at  Macao  were  granted  the 

60 


TREATIES  AND  COMMERCIAL  LAWS 


same  privileges.  The  treaty  which  the  American  Minister 
Caleb  Cushing  negotiated  with  China  in  1844,  therefore, 
simply  carried  out  the  tradition  thus  established,  and  the 
grant  of  extraterritorial  rights  was  obtained  from  China  as 
a  matter  of  course.  This  treaty  was  the  basis  upon  which 
all  disputes  with  foreigners,  of  whatever  nationality,  were 
settled  up  to  1858-60,  when  the  treaty  of  1842  between 
China  and  Great  Britain  was  revised.  This  treaty  provided 
several  distinct  things: 

1.  That  Chinese  committing  crimes  against  British  shall 
be  tried  and  punished  by  Chinese  authorities  and  law. 

2.  That  British  subjects  committing  any  crime  in  China 
shall  be  tried  and  punished  by  British  authorities  and  law. 

In  order  to  carry  out  the  provision  of  this  treaty  the  Brit- 
ish  Government  established  in  1860  a  Supreme  Court  at 
Shanghai.    The  Chinese  Government  established  a  mixed 
court  in  whose  proceedings  the  case  was  tried  by  the  official 
of  the  defendant's  nationality,  the  official  of  the  plaintiff's 
nationality  merely  attending  to  watch  the  proceedings  in  the 
interest  of  justice.     The  officer  so  attending  could  protest 
against  the  proceedings  in  detail  if  he  were  dissatisfied. 
The  law  administered  was  the  law  of  the  officer  trying  the 
case.     The  British  Supreme  Court  at  Shanghai  is  presided 
over  by  a  chief  justice  before  whom  personal  and  property 
rights  of  British  subjects  in  China  are  heard  and  deter- 
mined.   Complaints  against  British  subjects  residing  out- 
side  Shanghai  in  China  are  tried  before  the  nearest  British 
consular  officer,  subject  to  appeal.    The  mixed  court  estab- 
lished by  the  Chinese  Government  likewise  has  jurisdiction 
over  all  matters  in  which  a  subject  of  China,  residing  at 
Shanghai,  may  be  the  defendant  and  a  foreigner  the  plain- 
tiff.    Under  the  most  favored  nation  clause  in  the  treaties  of 
Other  nations,  whereby  they  enjoy  all  rights  and  privileges 
granted  by  China  to  the  ^^most  favored  nation,''  the  pro- 
visions of  this  treaty  with  Great  Britain  apply  to  other 


I't 


62 


TRADING  WITH  ASIA 


foreign  nations,  and  the  United  States  now  has  its  own  court 
at  Shanghai,  which  also  holds  circuit  sessions  in  other  treaty 
ports.  In  other  districts  where  the  American  court  does  not 
sit  the  American  Consul  exercises  judicial  power,  presiding 
over  what  are  known  as  Consular  Courts. 

The  International  Settlement  at  Shanghai.— Although 
the  Chinese  magistrate  in  the  Mixed  Court  has  jurisdiction 
over  cases  in  which  the  plaintiff  is  a  foreigner,  he  cannot 
arrest  even  a  Chinese  in  that  territory  in  the  city  of  Shang- 
hai, known  as  the  International  Settlement,  except  through 
the  agency  of  foreign  police.    This  International  Settle- 
ment IS  the  direct  outgrowth  of  the  theory  of  extraterritori- 
ality in  China.    After  this  theory  had  been  accepted  by  the 
Chinese,  provision  was  made  in  the  treaties  with  various 
foreign  powers  for  certain  specified  areas  in  Chinese  ports 
where  foreigners  were  permitted  to  reside,  which  should  be 
ceded  to  the  foreign  power  for  a  long  period  of  years,  and 
which  should  form  a  sort  of  legal  oasis  where  foreign  law 
reigned  supreme  not  only  over  foreigners,  who,  of  course, 
remain  under  their  own  laws  wherever  they  go  in  China,' 
but  over  such  Chinese  as  choose  to  reside  in  these  areas! 
Such  a  concession  was  given  to  the  French  in  Shanghai  and, 
adjoining  it,  similar  areas  were  granted  to  Great  Britain 
and  the  United  States,   who,  the  concessions  not  being 
separate  and  independent  as  was  the  French,  united  their 
interests  in  what  is  now  known  as  the  International  Set- 
tlement.   This  Settlement  has  a  regular  foreign  govern- 
ment, under  the  control  of  the  foreign  consular  representa- 
tives at  Shanghai,  and  a  municipal  council  of  nine  members 
elected  by  the  payers  of  taxes  up  to  a  certain  amount. 
These  taxes  are  assessed  by  the  taxpayers  at  a  yearly  meet- 
ing at  which  an  annual  fiscal  budget  is  approved.    Kegula- 
tions  for  police  and  fiscal  government  are  drawn  up  by  the 
consular  body  and  approved  by  the  foreign  minister  at 
Peking.    The  taxes  consist  of  a  small  land  and  house  tax 


TREATIES  AND  COMMERCIAL  LAWS 

and  are  levied  entirely  independently  of  the  Chinese  Gov- 
ernment.   The  police  force  is  under  the  Municipal  Council, 
and  consists  of  foreigners,  Chinese,  and  Indian  Sihks.    Ar- 
rests can  be  made  only  upon  warrant  by  the  proper  con- 
sular officers,  or  conditionally,  by  the  Mixed  Court  subject 
to  approval  of  the  senior  consular  representative.     If  the 
Chinese,  for  whose  arrest  the  Mixed  Court  makes  applica- 
tion, is  employed  by  a  foreigner,  the  order  must  first  be 
signed  by  the  Consul  of  the  foreigner,  and  countersigned  by 
the  senior  consular  officer,  and  such  offenders  may  also  claim 
the  right  to  be  tried  by  a  foreign  consular  officer  sitting  with 
the  magistrate  in  the  Mixed  Court.     These  rules  simply 
mean  that  aU  foreigners  and  natives  residing  in  the  Inter- 
national Settlement  at  Shanghai  shall  not  be  subject  to  in- 
terference on  the  part  of  the  Chinese  Government,  which 
Government  exercises  no  control  over  a  foreigner,  what- 
ever, and  its  control  over  a  native  is  exercised  under  the 
supervision  of  a  foreign  official.    There  are  International 
Settlements  at  Shanghai  and  Amoy.    In  the  former,  British 
interests  are  predominant,  while  American,  Japanese,  and 
Russian  interests  are  represented  on  the  Municipal  Council 
The  term  ** treaty  port''  does  not  necessarily  imply  foreign 
political  control,  although  most  of  them  have  regular  re- 
served areas.    At  others,  like  Cheefoo,  the  foreigners  have 
for  a  long  time  conducted  an  informal  international  munic- 
ipal  government.    At  some  of  the  newly  opened  treaty 
ports  special  arrangements  for  foreign   self-government 
have  been  made,  while  at  others  Chinese  municipal  admin- 
istrations have  been  provided  for  the  areas  reserved  for 
foreigners. 

Foreign  Concessions.-In  addition  to  these  foreign  con- 
cessions and  international  settlements  in  the  treaty  ports 
certain  areas  in  China  are  wholly  under  foreign  control 
by  treaty.    The  most  important  of  these  areas  are  the 
Japanese  leased  territories  of  Kwantung,  situated  on  the 


64 


TRADING  WITH  ASIA 


I 


Liaotung  Peninsula  of  South  Manchuria,  in  which  Dairen 
(Dalny)  and  Port  Arthur  are  situated;  the  former  Ger- 
man  leased   territory,   Kiachow,   in   Shantung   Province 
which   contains   the   port   of   Tsingtau;   and  the   British 
leased  territory  of  Kowloon  on  the  mainland  opposite  the 
British  Island  of  Victoria,  on  which  the  city  of  Hongkong  is 
located.    Dairen  is  a  Chinese  treaty  port,  but  is  also  a  free 
port,  while  Tsingtau  in  addition  to  being  a  treaty  port 
contains  a  free  zone.     Chinese  customs  are  levied  on  goods 
passing  from  these  ports  to  the  interior.     In  addition  to 
leased  territories,  China  has  also  granted  certain  conces- 
sions to  foreign  powers  in  the  shape  of  railway  areas,  which 
are  narrow  strips  of  territory  through  which  foreign  rail- 
ways are  built.     These  railways  are  known  as  concession 
railways  and  the  railway  areas  also  included  settlements 
near  the  stations  along  the  route.     The  concession  railroads 
are  the  South  Manchurian  Railroad  running  from  Chan- 
chung  to  Dairen;  the  Shantung  Railway  running  from 
Tsman  to  Tsingtau,  both  under  Japanese  control ;  and  the 
Chinese  Eastern  Railway,  which  runs  across  North  Man- 
churia to  Vladivostok  and  which  is  an  important  connect- 
ing link  in  the  trans-Siberian  Railroad,  including  a  branch 
from  Harbin  to  Changchun  to  join  the  South  Manchurian 
Railroad.     The  status  of  this  road  is  now  uncertain.     The 
Japanese  maintain  railway  settlements  at  Mukden,  Chang- 
chun, and  Antung,  although  the  Chinese  have  resumed  ad- 
ministrative control  in  the  former  Russian  area  at  Harbin 
Chinese  Tariflf—The   Chinese  tariff  as  it  affects  for- 
eigners IS  entirely  conventional,  that  is,  providt^d  for  by 
treaty  or  convention  with  foreign  governments.     The  tariff 
IS  administered  by  the  Maritime  Customs  Administration 
No  complete  revision  of  the  original  treaty  of  Tientsin  of 
1858  has  ever  been  made,  although  revisions  in  rates  have 
taken  place  on  two  occasions.     The  conventional  rate  of 
duty  IS  five  per  cent  ad  valorem  on  imports  and  exports 


TREATIES  AND  COMMERCIAL  LAWS  65 

but  to  simplify  collections  these  duties  were  converted  into 
specific  duties  on  the  basis  of  prices  in  1858,  and  the  re- 
visions which  have  been  granted  have  not  affected  this 
rate,  but  merely  the  prices  of  the  articles  concerned,  as 
these  have  risen  year  by  year  and  have  yielded  a  smaller 
and  smaller  proportion  of  the  five  per  cent  nominal  value 
of  imports  intended.    The  prices  on  imports  fixed  in  1858 
were  revised  in  1902  on  a  basis  of  prices  in  1897-99,  but  ex- 
port prices  remained  unchanged.     The  latest  adjustment 
was  m  1918,  when  a  five-year  average  of  prices  from  1912- 
1916  was  struck  as  a  basis  for  an  effective  five  per  cent  ad 
valorem  conversion   to   specific   rates.    All  these   adjust- 
ments, however,  had  to  be  made  with  the  consent  of  the 
signatory  powers  to  the  1858  treaty.     By  similar  consent 
export  duties  on  certain  exports  have  been  removed    or 
reduced,  in  order  to  stimulate  Chinese  industry.    These 
include  such  articles  as  tea,  strawbraid,  lace,  hair  nets  pre- 
served fruit,  and  ginger.  ' 

Maritime  Customs  Administration. -Maritime  customs 
duties  are  also  levied  on  articles  passing  from  one  Chinese 
treaty  port  to  another.     An  article  produced  in  Shanghai 
and  sent  to  Tientsin,  must  pay  not  only  the  export  duty 
from  Shanghai,  but  an  additional  two  and  one-half  per 
cent  ad  valorem  import  duty  at  Tientsin.    This  is  known 
as  a  ''coast  trade  -  duty.    On  the  other  hand,  an  article 
imported  from  abroad  into  Shanghai,  on  which  an  import 
duty  is  levied,  may  be  exported  to  any  other  treaty  port 
withm  three  years  without  extra  tax.     This  is  an  important 
right,   and  of  much  more  importance  is  the   provision 
whereby  such  imported  articles  may  be  protected  from  all 
native  customs  charges,  and  what  is  known  as  likin,  or  bar- 
rier  tax,  arbitrarily  imposed  en  route  to  a  non-treaty  port 
or   city,   by  the  payment   of  additional   ''transit   dues" 
amountmg  to  an  extra  two  and  one-half  per  cent     AU 
goods  transported  by  steam  vessels  and  what  are  termed 


66 


TRADING  WITH  ASIA 


"chartered   junks''   come  under  the  Maritime   Customs 
Administration,  are  subject  to  the  above  rules.    Goods 
transported  in  other  ways,  no  matter  of  what  origin,  are 
subject  to  the  "regular*'  or  Chinese  native  customs,  and 
likewise  to  the  likin,  or  barrier  tax.    Railroad  freight  is 
not   classed  under  maritime   customs  rules,   and   foreign 
goods  so  transported  to  the  interior,  unless  protected  by  a 
"transit  dues  customs  pass"  showing  that  an  extra  half 
duty  has  been  paid,  are  subject  to  either  native  customs 
charges  or  likin  or  both.     These  * '  transit  dues"  on  imported 
articles,  therefore,  compensate  for  the  obvious  burden  on 
native  goods  imposed  by  the  ** coast  trade  duty"  on  ship- 
ments from  one  treaty  port  to  another,  and  this  apparent 
hardship  on  goods  of  native  production  is  further  modi- 
fied by  a  second  provision,  whereby  Chinese  domestic  fac- 
tory products,  including  those  manufactured  with  foreign 
capital,  may  be  sent  to  any  part  of  China  free  from  all 
further  taxation  upon  the  payment  of  what  is  termed  an 
"excise,"  equal  to  the  original  import  duty  on  foreign 
goods  of  the  same  class.     A  duty  quite  unique  is  the  Peking 
octroi,  which  is  a  duty  of  three  per  cent  ad  valorem  levied 
at  the  gate  of  Peking  on  all  goods  entering  that  city,  and 
is  distinct  from  both  native  customs  and  likin.    Trade  with 
China  is  open  to  all  classes  of  goods  except  salt,  a  govern- 
ment monopoly,  opium,  firearms  and  explosives,  only  under 
special  permit,  and  industrial  explosives.     The  prohibition 
of  the  latter  is  a  serious  handicap  upon  mining  and  con- 
struction work. 

Japan 

Early  Commercial  Treaties  with  Japan.—The  early 
Japanese  trade  became  a  Dutch  monopoly  after  the  expul- 
sion of  the  foreigners  in  1638,  and  remained  so  until  1858, 
when  the  first  commercial  treaty  was  signed  with  the  United 
States.    In  the  same  year  a  commercial  treaty  with  Great 


TREATIES  AND  COMMERCIAL  LAWS 


67 


Britain  was  also  signed.    By  these  early  treaties  Japan 
granted  extraterritorial  jurisdiction  to  foreign  powers  just 
a^  China  had  done,  and  notwithstanding  a  growing  resent- 
ment on  the  part  of  the  Japanese  Government,  the'^powers, 
led  by  Great  Britain,  steadfastly  refused  to  grant  Japan 
any  more  recognition  than  was  granted  China  until  1894. 
By  that  time  the  Constitution  had  gone  into  effect,  the 
first  Diet  had  assembled,  and  Japan  was  considered  by  the 
powers  to  have  reached  her  majority.     Consequently  by 
treaty  with  Great  Britain,  followed  by  treaties  with  France, 
Germany,  Russia,  and  Italy— the  United  Statea  having  al- 
ready signed  a  treaty  of  recognition  several  years  earlier 
conditional  upon  similar  action  by  the  other  powers— Japan 
was  granted  full  judicial  autonomy  and  restored  the  tariff 
autonomy  which  she  had  given  up  in  the  treaties  of  1858 
with  the  West,  although  the  latter  treaties  did  not  have 
full  effect  until  1911.    A  few  days  later  the  war  with  China 
was  declared,  and  when  France,  Germany,  and  Russia  de- 
manded the  return  of  Port  Arthur,  Great  Britain  refused 
to  join  in  the  protest.     This  led  to  a  mutual  rapprochement 
between  Great  Britain  and  Japan,  whose  interests  in  the 
Far  East  were  in  many  respects  identical,  and,  as  a  conse- 
quence, the  Anglo-Japanese  Alliance  was  signed  in  1902  for 
the  purpose  of  maintaining  the  independence  of  China  and 
Korea.    By  the  terms  of  this  Alliance  both  parties  dis- 
avowed any  aggressive  policy  in  the  Far  East,  and  each 
promised  to  come  to  the  aid  of  the  other  if  they  became  in- 
volved with  more  than  one  power  in  the  defense  of  these 
principles.    Two  years  later  the  Alliance  was  renewed  and 
extended  to  include  India  and  Asia  generally,  and  it  was 
furthermore  provided  that  if  either  party  were  attacked  in 
the  defense  of  these  rights  the  other  would  come  to  their 
aid.    The  renewed  treaty  was  announced  toward  the  end 
of  the  Russo-Japanese  War  and  was  destined  to  maintain 
peace  in  the  Far  East.   Again  renewed  for  a  period  of  ten 


68 


TRADING  WITH  ASIA 


years  in  1911,  this  Alliance  contained  a  clause  practically 
excluding  the  United  States  from  its  provisions.  In  1907 
France  and  Russia  both  signed  treaties  with  Japan  agreeing 
to  recognize  the  independence  of  China,  to  mutually  main- 
tain order  there,  and  to  defend  the  ''open  door"  principle 
of  equal  opportunity  for  all.  The  early  effects  of  the  com- 
mercial treaties  between  Japan  and  Great  Britain  and  the 
United  States,  under  the  terms  of  which  both  nationals  are 
free  to  travel  and  reside  in  the  territory  of  the  other,  were 
to  arouse  opposition  on  the  part  of  white  inhabitants  of 
British  Columbia  and  of  California,  where  Japanese  immi- 
grants, it  was  claimed,  competed  with  the  original  settlers, 
and  were  driving  them  out  because  of  a  lower  standard  of 
living.  In  order  to  remedy  a  situation  which  was  full  of 
serious  possibilities,  the  Japanese  Government  voluntarily 
agreed  to  restrict  emigration  of  laborers  and  workmen  of 
certain  classes  to  these  countries,  at  the  same  time  formally 
maintaining  their  full  rights  under  the  treaty.  These 
*' gentlemen's  agreements''  have  been  in  effect  since  1908. 

The  Japanese  Statutory  Tariff.— It  was  not  until  1911 
that  Japan  received  full  tariff  autonomy.  By  the  terms 
of  the  revised  commercial  treaties  of  1899  a  general  Japa- 
nese statutory  tariff  was  established,  but  certain  tariff  con- 
ventions with  foreign  countries  were  by  the  most  favored 
nation  clause  extended  to  all  countries  until  1911.  The 
customs  tariff  during  this  period,  therefore,  was  a  com- 
bined conventional  and  statutory  tariff.  The  rates  up  un- 
til 1899  had  not  averaged  over  five  per  cent,  and  the  total 
receipts  in  any  one  year  had  never  been  over  five  million 
dollars.  By  1900  the  average  rate  of  duty  had  increased 
to  eight  and  one-half  per  cent,  and  by  1911  it  had  reached 
an  annual  average  of  fifteen  per  cent.  In  the  same  year 
$18,000,000  in  revenue  was  realized  from  the  tariff. 

The  Effect  of  Tariff  Changes  on  Industry.— The  im- 
mediate  effect  of  the  lapsing  of  the  conventional  tariffs  in 


TREATIES  AND  COMMERCIAL  LAWS 


69 


1911  was  to  put  into  effect  certain  rates,  which  had  been 
written  into  the  statutory  tariff,  years  before,  but  had  been 
a  dead  letter  up  until  that  time.     The  rates  so  framed  had 
been  fixed  with  due  consideration  for  the  economic  effects 
upon  Japan,  and  in  every  case  Japanese  industries  were 
well  protected,  although  every  attempt  was  made  to  con- 
serve good  relations  with  foreign  countries  by  interfering  as 
little  as  possible  with  established  trade.    Japanese  indus- 
tries were  not  ready  at  this  time  to  meet  the  full  home  de- 
mands for  manufactured  goods,  which  the  new  tariff  would 
give  them  the  opportunity  to  supply,  so  that  the  policy  was 
adopted  of  simply  adhering  to  the  statutory  rates  fixed  some 
years  before  with  the  view  to  revising  them  as  circum- 
stances demanded. 

The  Opposition  of  England  to  an  Effective  Statutory 
Tariff.— This  attitude  on  the  part  of  Japan  of  merely  put- 
ting into  effect  the  statutory  rates  long  inoperative,  aroused 
no  little  opposition  from  British  manufacturers  and  mer- 
chants, who  took  the  view  that  in  as  much  as  these  statu- 
tory rates  were  higher  than  the  old  conventional  rates, 
Japan  was  taking  an  unwarranted  advantage  of  the  situa- 
tion. But  this  was  finally  adjusted  and  Japan,  long  bound 
by  unilateral  conventional  tariffs,  was  allowed  to  formu- 
late and  put  into  force  an  industrial  policy  which  would 
meet  her  economic  needs.  As  a  matter  of  fact,  the  statu- 
tory tariff  had  yielded  89  per  cent  of  the  total  customs 
revenue,  and  Japan  was  well  within  her  rights  in  demand- 
ing such  an  increase  in  rates  as  would  yield  a  revenue 
commensurate  with  her  needs  and  even  foster  certain  indus- 
tries which  were  still  in  their  infancy. 

The  Effect  of  Tariff  Reform  on  Revenue.— This  ques- 
tion of  revenue  was  just  at  this  time  a  very  pressing  one 
for  the  Japanese  Government.  The  interest  on  the  enor- 
mous debt,  incurred  by  the  war  with  Russia,  had  to  be  paid, 
and  loans  made  prior  to  that  time  were  coming  due  and  had 


70 


TRADING  WITH  ASIA 


to  be  redeemed.    A  substantial  source  of  revenue  had  to  b« 
found  and  this  was  only  possible  from  two  sources,  internal 
revenue  and  customs  tariff.    Eealizing  this  situation,  Great 
Britain  reached  certain  reciprocal  agreements  with  Japan 
which  were  satisfactory,  and  substantial  reductions  in  the 
duties  on  textiles,  iron,  and  steel  formed  the  basis  for 
similar  negotiations  with  other  powers.    These  reductions 
in  the  Japanese  statutory  tariff  amounted  to  from  20  to  33 
per  cent  of  the  original  rates.    In  return  Great  Britain 
agreed  to  continue  to  admit  free  of  duty  certain  Japanese 
specialties,  such  as  silk  cloth,  copper,  straw  goods,  camphor, 
etc.,  into  England,  but  not  into  her  dominions  or  colonies 
without   their   consent.     This  reciprocal  agreement   with 
Great  Britain  was  after  all  entirely  gratuitous  on  the  part 
of  Japan,  because  of  Great  Britain's  free  trade  policy,  and 
it  evinced  a  strong  desire  on  tlie  part  of  Japan  to  placate 
a,nd  conciliate  the  British  nation.     These  concessions  and 
like  concessions  to  other  powers  were  all  applicable  to  every 
treaty  power  with  Japan  under  the  ''most  favored  nation" 
clause  in  the  commercial  treaties.    As  a  whole,  therefore, 
they  constituted  a  very  liberal  reduction  in  the  moderate 
rates  which  Japan  had  determined  upon  as  necessary  to  in- 
sure sound  industrial  advance,  but  in  spite  of  that  fact 
Japan  has  gradually  developed  many  industries  such  as 
the  textile,  paper,  chemical,  and  glass,  and  during  the  last 
war  the  shoe  and  leather,  dyestuff,  and  iron  and  steel  in- 
dustries.    In  many,  as  in  the  iron  and  steel  industry,  Japan 
is  tremendously  handicapped   by  a  lack  of  natural   re- 
sources, but  despite  this  handicap  she  has  created  an  en- 
viable record  in  industrial  advance  and  has  succeeded  not 
only  in  supplying  her  own  markets  in  many  lines  formerly 
imported,  but  in  furnishing  other  markets,  espe<;ially  in  the 
Far  East,  Australia,  South  Africa,  and  South  America,  with 
many  lines  of  manufactured  goods  formerly  supplied  by 
Western  nations. 


TREATIES  AND  COMMERCIAL  LAWS  71 

The  Revision  of  Codified  Law.-In  order  to  obtain  ju- 
dicial  autonomy  it  became  necessary  for  Japan  so  to  revise 
ner  codified  law  so  as  to  conform  and  harmonize  with  Eu- 
ropean and  American  law.     It  is  not  strange,  therefore,  to 
note  strong  foreign  influence  in  the  present  day  Japanese 
laws     In  this  adaptation  Japan  showed  no  partiality  but 
sought  the  best  that  could  be  obtained.    After  much  study 
the  French  penal  codes  and  criminal  codes  were  taken  as  a 
basis  for  the  new  Japanese  laws  on  these  subjects,  while 
German  influence  was  strongly  noticeable  in  the  civil  and 
commercial  codes.     The  latter  is  divided  into  five  books 
which  deal  briefly  with  (1)  fundamental  rules,  (2)  meth- 
ods of  doing  business  by  companies,  (3)  commercial  acts 
(4)  commercial  paper,  and  (5)  maritime  law.    The  law  of 
bankruptcy,  formerly  under  the  commercial  code,  has  now 
been  made  a  separate  branch  of  the  law 

J!"'  ^''^'^}  System.-The  Japanese  judicial  system  op- 
erates without  juries,  and  the  judges  and  public  procur- 
ators,  corresponding  to  our  district  attorneys,  are  appointed 
after  examination.     There  are  four  classes  of  courts,  district 
or  lower  courts  presided  over  by  one  judge,  who  decides 
small  civil  and  criminal  cases;  local  courts,  which  are  courts 
of  first  instance  m  more,  important  civil  and  criminal  cases 
and  are  presided  over  by  three  judges;  courts  of  appeal,' 
hearing  appeals  from  local  courts;  and  the  Court  of  Cassa' 
tion,  or  Supreme  Court,  presided  over  by  seven  judges  in 
each  of  ,ts  twa  sections,  and  hearing  appeals  from  both  the 
court  of  appeals  and  the  lower  courts 

Patent  Laws  and  Trade-Mark  Regulations—The  Jap- 
anese  patent  laws  are  applied  indiscriminately  to  foreign- 
ers and  Japanese.  Any  citizen  of  a  country  which  is  a 
EfJ'  *^!,^^^^^^^t^«°^l  Convention  for  the  Protection  of 
Industrie  Property  is  granted  on  application  for  a  patent 
or  invention,  a  right  of  priority  good  for  one  year  L  t"e 
case  of  a  patent,  and  four  months  in  that  of  a  design  or 


72 


TRADING  WITH  ASIA 


trade-mark.  A  Japanese  patent  runs  for  15  years  and 
may  be  extended  under  certain  conditions.  A  design  runs 
for  10  years,  and  a  utility  model  three  years  with  a  right  of 
extension  for  another  three  years.  Trade-marks  are  pro- 
tected for  20  years  with  rights  of  extension.  Right  of  ap- 
peal to  the  courts  for  these  rights  is  granted  unsuccessful 
applicants  through  the  Patent  Bureau.  The  application 
fees  are  $165  for  a  patent,  $8.50  for  a  design,  $10.00  for  a 
trade-mark,  and  $7.50  for  a  utility  model. 

Land  Tenure  by  Foreigners.— The  legal  status  of  for- 
eigners  in  Japan  is  similar  to  that  of  foreigners  in  most 
European  countries.  They  are  not  permitted  to  own  land, 
however,  and  are  subject  to  income,  business,  and  customs 
taxation  on  a  par  with  Japanese.  On  the  whole,  the  ad- 
ministration of  the  law  is  fair  in  regard  to  foreigners,  and 
compares  favorably  with  that  of  any  other  country. 

Questions 

1.  What  is  extraterritoriality? 

2.  Describe  the  administration  of  justice  in  China,  as  relating  to 

foreigners. 

3.  What  is  a  Mixed  Court? 

4.  What  is  the  nature  of  the  Chinese  tariff,  and  how  is  it  levied! 

5.  Name  the  foreign  concessions  and  describe  their  extent. 

6.  What  was  the  attitude  of  Japan  in  putting  into  effect  her 

statutory  tariff,  and  how  was  the  situation  mt't? 

7.  What  was  the  effect  of  the  financial  condition  of  Japan  on 

tariff  revision? 

8.  Outline  the  principal  features  of  the  Japanese  commercial 

code. 

9.  Describe  the  judicial  system  of  Japan. 

10.  What  is  the  status  of  foreigners  under  Japanese  patent  laws? 


CHAPTER  V 


AQRICUI/rmiE,   MINES,  AND  MANUFACTURING  INDUSTRIES   OF  CHINA 

The  total  area  of  China,  including  Mongolia,  Turkistan, 
and  Tibet,  is  4,278,352  square  miles.  The  exact  population 
is  unknown,  but  estimates  vary  from  325,000,000  to  400,- 
000,000.  In  China  proper  there  are  18  provinces  whose 
average  population  is  174  to  the  square  mile,  the  most  pop- 
ulous province  being  Shantung  with  528  to  the  square  mile, 
and  the  least  populous  being  Kansu  with  only  40  to  the 
square  mile.  China  is  one-third  the  size  of  the  whole  Brit- 
ish Empire,  and  one-fifth  larger  than  the  United  States  in 
area,  while  in  population  it  is  exceeded  only  by  the  popu- 
lation of  the  British  Empire. 

For  commercial  purposes,  China  proper  may  be  divided 
into  three  main  trade  zones.     The  northern,  having  for  its 
outlet  the  port  of  Tientsin,  covers  the  large  fertile  valley  of 
the  Yellow  River,  and  extends  to  the  low  plains  of  Man- 
churia.   The  central  consists  of  the  basin  of  the  Yangtze 
River,  and  extends  from  the  far  interior  of  Szechwan 
Province  to  the  ocean  at  Shanghai,  which  is  the  chief  port. 
The  southern  concentrates,  at  Canton,  the  trade  originating 
in  the  valley  of  the  West  River  and  its  tributaries.     Fully 
70   per   cent    of    the    population    is    concentrated    along 
the  banks  of   these  main   rivers   and   their  tributaries, 
the  densest    population   being   found   in    the   low   delta 
regions. 

AGRICULTURAIi  INDUSTRY 

The  principal  agricultural  products  of  China  are  silk, 
vegetable  oils  and  oil  seeds,   rice,   tea,  cotton,   tobacco' 

78 


74 


TRADING  WITH  ASIA 


cereals,  fibers,  and  vegetable  wax.  Official  production  sta- 
tistics are  lacking,  and  export  figures  furnish  the  only  clue 
to  the  volume  of  Chinese  production. 

Silk. — The  silk  crop  is  the  most  valuable  crop  which 
China  exports,  and  is  raised  mainly  in  the  Canton  district, 
46  per  cent  of  all  silk  products  being  attributed  to  the 
southern  trade  area.  Silk  is  raised,  however,  all  over 
China,  and  especially  in  the  provinces  of  Szechwan,  Shan- 
tSg,  and  Yunnan.  Wild  silk  has  recently  become  more 
popular,  owing  to  the  belief  that  it  is  stronger  in  texture 
than  the  cultivated.  The  silk  industry  as  a  whole,  how- 
ever, has  ste^clJJy  declined,  due  to  the  lack  of  scientific  care 
in  eliminating  diseased  worms.  This  decline  is  best  shown 
in  the  Chinese  export  statistics,  from  which  it  will  be  no- 
ticed that  the  exports  of  steam  filature  silk,  that  is,  stand- 
ard raw  silk  for  foreign  manufacture,  have  decreased  from 
nine  million  pounds  in  1913  to  eight  million  pounds  in 
1918,  although  the  export  value  has  nearly  doubled ;  on  the 
other  hand  waste  silk,  which  is  largely  the  product  of  un- 
skilful reelers,  increased  from  fifteen  million  pounds  in 
1913  to  seventeen  million  pounds  in  1918.  This  increase 
accounts  for  the  total  increase  in  Chinese  silk  exports  from 
forty-six  million  pounds  in  1913  to  forty-eight  million 
pounds  in  1918.  The  value  of  these  exports  has  risen  from 
$75,000,000  in  1913  to  $127,000,000  in  1918,  due  to  the  rise 
in  the  price  of  silk  throughout  the  world. 

Oils  and  Oilseeds. — This  second  great  article  of  export 
has  attained  a  wide  market  during  the  war  because  of  its 
glycerine  content.  Soya  bean  oil  is  produced  in  small 
mills  throughout  the  entire  country,  but  particularly  in 
the  neighborhood  of  Shanghai  and  in  Manchuria. 

The  soya  bean  oil  exports  have  risen  from  32,500  tons  in 
1913  to  151,000  tons  in  1918,  or  about  370  per  cent.  To- 
gether with  this  increase  in  soya  bean  oil  exports  has  come 
a  decrease  in  the  export  of  soya  beans  from  688,000  tons  in 


INDUSTRIES  OF  CHINA 


75 


1913  to  588,000  tons  in  1918,  which,  nevertheless,  consider- 
ing the  oil  exports,  denotes  a  considerable  increase  in  soya 
bean  production  during  this  period,  and,  of  course,  a  great 
development  in  the  oil  crushing  industry.  A  million  tons 
of  bean  cake  were  exported  in  1918,  valued  at  $35,000,000, 
compared  with  700,000  tons  in  1913.  This  is  used  largely 
for  fertilizer  in  Japan. 

The  export  of  peanut  oil  has  shown  a  less  momentous 
gain  of  from  17,000  tons  in  1913  to  39,000  tons  in  1918. 
Peanut  growing  was  introduced  by  American  missionaries 
in  Shantung  Province  some  decades  ago,  and  the  product 
now  holds  a  commanding  place  in  the  exports  of  China. 
In  the  case  of  peanut  kernels  and  peanuts  in  the  shell,  the 
export  has  also  declined  from  82,000  tons  in  1913  to  43  000 
tons  in  1918. 

^^ina  wood  oil,  made  from  the  seed  pod  of  the  Aleurtes 
tree,  attained  an  export  volume  of  32,500  tons  in  1918, 
there  being  no  separate  statistics  for  the  1913  exports. 
Cottonseed  oil  amounting  to  8,000  tons  was  exported  in 
1918,  and  furnishes  an  interesting  commentary  upon  the 
growth  of  cotton  production  in  China.    In  the  same  year 
11,000  tons  of  cottonseed  were  shipped   abroad.    Other 
vegetable  oils  exported  in  smaller  amounts  included  tea 
oil  and  sesame  seed  oil.    The  export  of  sesame  seeds  has 
fallen  off  considerably  in  the  past  five  years.    In  1913, 
135,000  tons  were  shipped  against  only  15,000  tons  in  1918.' 
Rape  seed  exports,  on  the  other  hand,  increased  somewhat 
from  41,000  tons  in  1913  to  45,000  tons  in  1918.    An  im- 
portant new  oil  seed  in  the  Chinese  export  market  is  lin- 
seed of  which  6,000  tons  were  exported  in   1918.     The 
export  of  rape  and  sesame  seed  cake  declined  from  87  000 
tons  in  1913  to  76,000  tons  in  1918. 

Rice.— Rice  is  grown  universally  on  small  garden  farms 
not  exceeding  in  size  more  than  three  or  four  acres.  Due 
to  the  lack  of  official  Chinese  statistics,  there  is  no  definite 


76 


TRADING  WITH  ASIA 


n 


knowledge  of  the  production,  but  it  is  estimated  at  about 
^QSXfiQQ  tons.  Chinese  foreign  trade  in  rice  is  large,  but 
the  exports  almost  balance  the  imports.  The  great  variety 
of  rice  plants  produce  many  different  grades  which  find  a 
ready  market  in  various  parts  of  the  Far  East.  As  a  rule 
the  export  of  the  Chinese  rice  is  of  the  higher  and  the  im- 
port of  the  lower  grade.  The  export  has  fallen  in  recent 
years,  due  to  lack  of  shipping  facilities,  and  only  2,000  tons 
went  out  in  1918. 

Tea.— The  consumption  of  tea  in  China  is  estimated  at 
five  pounds  per  head  of  the  population.  The  origin  of  tea 
as  a  beverage  is  found  in  the  sixth  century  a.  d.,  and  is  sup- 
posed to  result  from  an  effort  to  make  boiled  water,  which 
it  is  necessary  to  use  for  the  prevention  of  disease,  more 
palatable.  The  tea  industry  is  carried  on  in  millions  of 
small  homesteads  throughout  China,  there  being  no  planta- 
tions as  in  India  and  the  Dutch  East  Indies.  The  leaves 
are  picked  by  the  members  of  the  families  and  dried  in  the 
sun,  then  turned  over  to  middlemen  who  subject  them  to 
the  process  of  firing.  Green  tea  leaves  are  roasted  almost 
immediately  after  they  are  gathered.  There  are  usually 
three  pickings  of  tea,  one  early  in  April,  one  in  May,  and  a 
later  one  in  August.  Brick  tea  is  manufactured  in  China 
for  the  Russian  market  15y  pressing  the  damp  tea  leaves  in 
a  mould  eight  inches  by  twelve  inches  and  one  inch  thick, 
and  marketed  principally  at  Hankow. 

The  foreign  markets  for  Chinese  tea  have  been  seriously 
affected  by  the  growth  of  the  industry  in  Ceylon  and  Java, 
where  more  scientific  methods  have  lowered  production 
costs.  Only  11,000  tons  of  black  and  10,000  tons  of  green 
tea  were  exported  from  China  in  1918,  compared  with 
36,000  tons  of  black  and  18,000  tons  of  green  tea  exported 
in  1913.  The  brick  tea  exports  have  suffered  even  more 
severely  because  of  the  chaotic  conditions  in  Russia, 
China's  principal  brick  tea  market.    Forty  thousand  tons 


INDUSTRIES  OF  CHINA 


7f 


of  black  and  green  brick  tea  were  exported  in  1913,  and, 
in  1918  this  had  fallen  to  5,000  tons. 

Cotton.— The  cotton  plant  grows  best  in  the  Yangtze 
Delta  and  in  the  two  provinces  to  the  north  of  the  Yangtze. 
The  native  cotton  is  short  staple,  but  American  cotton  seed 
has  lately  been  introduced,  which  furnishes  satisfactory 
material  for  the  woof,  and  the  cotton  spinning  industry 
has  in  the  last  two  years  made  enormous  headway.  There 
are  now  about  50  cotton  mills  in  China  with  over  2,000,000 
spindles.  The  bulk  of  these  mills  are  located  in  Shanghai. 
The  majority  are  British  owned,  although  there  are'a  num- 
ber of  Japanese  owned  mills  as  well.  Practically  all  of  the 
mills  run  day  and  night  on  a  23-hour  schedule.  The  an- 
nual production  of  yam  is  estimated  at  250,000,000  pounds, 
and  of  cotton  cloth  50,000,000  yards,  practically  all  of 
which  is  consumed  at  home.  About  10,000,000  pounds  of 
nankeens  and  cotton  yams  were  exported  in  1918. 

The  exports  of  raw  cotton  have  increased  from  50,000 
tons  in  1913  to  86,000  tons  in  1918.  It  is  estimated  that 
there  are  9,000,000  acres  of  land  in  China  capable  of  pro- 
ducing cotton,  and  a  tremendous  development  in  this  in- 
dustry is  looked  forward  to  in  the  near  future.  Heavy 
demands  for  cotton-spinning  and  weaving  machinery  are 
now  being  filled  by  American  factories.        ' 

Tobacco.— The  production  of  tobacco  is  about  70,000,000 
pounds  annually  and  it  is  cultivated  in  large  quantities  in 
every  province  of  China.  Aside  from  this  enormous  pro- 
duction, tobacco  still  remains  the  second  largest  import 
into  China,  the  first  being  cotton  goods.  Cigarettes  are  al- 
most the  universal  form  in  which  tobacco  is  used.  The  ex- 
ports of  leaf  tobacco  have  increased  from  10,000  tons  in 
1913  to  12,000  tons  in  1918,  and  in  addition  4,000  tons  of 
prepared  tobacco  were  sent  abroad  in  the  latter  year. 

Cereals.— Wheat  is  the  principal  cereal  entering  into  the 
export  trade,  and  120,000  tons  were  exported  both  in  1913 


\ 


78 


TRADING  WITH  ASIA 


and  1918.  Millet- and  fiorgkani  to  the  amount  of  61,000 
tons  were  also  exported  in  1918.  Other  cereals  entering 
the  export  trade  include  maize,  barley,  and  oats. 

Fibers. — Ramie,  hemp,  and  jute  are  the  three  most  im- 
portant fibers  in  point  of  production  in  China.  Ramie,  or 
China  g^rass,  is  produced  mainly  in  Hupeh  and  Szechwan, 
and  exported  to  the  extent  of  about  18,000  tons  annually. 
Hemp  is  more  widely  distributed,  and  in  some  provinces 
is  harvested  three  times  a  year.  The  export  amounts  to 
about  10,000  tons  per  year.  Jute  is  grown  principally  in 
Chihli  Province  and  exported  to  the  extent  of  6,000  tons 
annually. 

Vegetable  Wax. — ^Vegetable  wax  is  a  product  of  the  tal- 
low, or  rhus,  tree.  It  is  a  wax-like  substance  formed  be- 
tween the  kernel  and  the  outer  skin  of  the  seed.  About 
10,000  tons  are  exported  annually,  and  the  export  has 
fallen  off  about  50  per  cent  in  five  years.  White  wax  is 
also  grown  in  Szechwan.  This  is  produced  by  wax  insects, 
which  are  placed  on  dwarf  ash  trees  and  cover  themselves 
and  the  branches  with  a  thick  coating  of  wax. 

Vegetables. — Fresh,  dried,  and  salted  vegetables  to  the 
amount  of  about  35,000  tons  were  exported  in  1918,  but 
these  exports  had  declined  from  78,000  tons  exported  in 
1913. 

Pastoral  Industries. — The  Chinese  are  primarily  agri- 
culturists, pastoral  lands  only  being  used  when  unfit  for 
cultivation.  Cattle  breeding  has  not  yet  been  engaged  in 
to  any  great  extent,  although  experimental  stations  have 
been  established  recently,  and  the  export  of  livestock  has 
consequently  been  increased.  The  dairying  industry  has 
not  been  carried  on  except  in  a  small  way,  as  the  Chinese 
do  not  use  dairy  products.  About  3,000,000  poultry  and 
850  tons  of  fresh  and  preserved  eggs,  together  with  19,000 
tons  of  egg  albumen  and  yolk  were  exported  in  1918. 
These  eggs  are  gathered  from  individual  farms  all  over 


INDUSTRIES  OF  CHINA 


79 


China,  and  form  a  most  important  source  of  income  to  the 
people.  Trade  in  undressed  skins  of  both  cows  and  water 
buffalos  is  centered  in  Hankow,  26,000  tons  being  shipped 
in  1918,  which  is  7,000  tons  less  than  in  1913.  Goat  skins 
untanned  are  exported  chiefly  from  Tientsin,  which  draws 
on  the  sheep  herds  and  goat  herds  of  Manchuria  and  inner 
Mongolia  for  its  product.  About  8,000,000  pieces  were 
exported  in  1918.  Fifteen  hundred  tons  of  horse  and  mule 
rawhides  were  also  shipped  abroad  in  1918,  Five  thou- 
sand tons  of  pig  bristles  were  exported  mainly  to  Japan,  for 
the  manufacture  of  brushes,  during  the  same  year.  Sheep 
raising,  centered  in  Mongolia,  furnished  21,000  tons  of 
wool  for  export  in  1918.  Twenty-five  hundred  tons  of  cam- 
eV&  hair  and  800  tons  of  goat's  hair  were  also  sent  abroad. 
Forests. — ^Wholesale  deforestation  has  depleted  China 
of  a  large  portion  of  its  forests,  and  timber  must  now  be  im- 
ported for  the  construction  of  railroads  and  for  other  pur- 
poses. The  only  large  forest  reserves  in  China  are  in  the 
Yalu  region  of  Manchuria,  which  supplied  about  32,000,000 
square  feet  of  soft  wood  for  export  in  1918.  A  Bureau  of 
Forestry  has  been  created,  and  a  defijiite  attempt  has  been 
made  to  reforest  the  bare  hills  of  China. 

Mines  and  Minerals 

Ooal.~The  production  of  coal  in  China  is  estimated  at 
about  20,000,000  tons,  the  richest  production  being  that 
of  the  Sailan  mines  in  Honan  Province,  under  joint  British 
and  Chinese  control,  whose  annual  output  is  about  13,000,- 
000  tons.  The  Fushun  collieries,  under  Japanese  control, 
contain  deposits  of  unparallelled  thickness.  The  coal 
mines  of  Shantung,  developed  by  German  capital  and  now 
in  the  hands  of  Japanese,  are  the  three  largest  coal  mines 
in  estimated  size  of  deposits.  Coal  mining  is  now  carried 
on  by  foreign  concessions,  joint  Chinese  and  foreign  conces- 
sions, and  by  purely  Chinese  mines.    The  operation  of  new 


80 


TRADING  WITH  ASIA 


INDUSTRIES  OF  CHINA 


81 


mining  laws,  which  came  into  effect  in  1912,  has  distributed 
the  investment  of  foreign  capital  equally  with  (Chinese  cap- 
ital in  Chinese  mining  projects,  and  there  has  been  little 
tendency  on  the  part  of  the  Chinese  to  develop  the  proper- 
ties themselves.  The  result  has  been  a  steady  increase  in 
the  import  of  coal  for  industrial  purposes,  although  the 
potential  production  is  probably  the  largest  in  the  world. 
The  development  of  Chinese  coal  mines  depends  largely 
upon  better  transportation,  and  secondly  upon  CJhinese  and 
foreign  cooperation.  In  1918  1,700,000  tons  of  coal  were 
exported  from  China. 

Iron.—The  largest  known  deposits  of  iron  ore  are  near 
Hanljpw  on  the  Yangtze  and  near  Hanking  lower  down  on 
the  same  river,  although  large  deposits  are  known  to  exist 
in  Shansi,  Shensi,  and  in  Manchuria.  The  Hanyeping  Iron 
and  Coal  Company  at  Hankow  controls  the  Tayeh  iron 
mines  and,  while  this  company  is  nominally  Chinese,  Jap- 
anese have  invested  heavily  in  it,  and,  by  the  Treaty  of 
1915  with  Japan,  the  outcome  of  the  famous  21  demands, 
the  Chinese  Government  promises  not  to  convert  the  com- 
pany into  a  state  owned  concern  nor  to  compel  it  to  borrow 
money  from  other  than  Japanese  sources.  The  output  of 
this  company  is  about  200,000  tons  annually  of  pig  iron, 
practically  all  of  which  goes  to  Japan.  Steel  rails,  plates, 
and  nails  are  now  being  manufactured  for  domestic  use. 
The  only  other  iron  mine  in  China  is  the  Penhsihu,  which 
is  said  to  be  the  equivalent  of  the  mine  at  Hankow.  It  is 
entirely  controlled  by  Japanese  capital,  and  the  product  is 
all  sent  to  Japan.  In  1918  China  exported  411,000  tons  of 
iron  ore,  186^00  tons  of  pig  iron,  and  23,000  tons  of  bars, 
rods,  plates,  sheets  and  rails,  against  300,000  tons  of  iron 
ore,  71,000  tons  of  pig  iron,  and  1,000  tons  of  iron  manu- 
factures in  1913. 

Copper. — YunnstfL  Province  is  one  of  the  richest  copper 
districts  in  the  world,  although,  due  to  antiquated  methods 


\ 


of  working  the  deposits,  the  production  has  never  been  over 
2,000  tons.  Copper  is  also  produced  in  Kansu,  where  a 
plant  has  been  established  by  the  British  for  producing 
the  ore.  There  are  also  government  copper  mines  in 
Kiangsi,  Szechwan,  and  Hupeh.  These  are  still  in  the  ex- 
perimental stage  and  the  production  is  small.  In  1918 
3,000  tons  were  exported  from  all  China.  Copper  is 
largely  used  in  China  for  the  manufacture  of  bronze,  brass, 
and  copper  art  objects,  and  for  coins  which  are  in  daily 
use.  The  production  of  copper  does  not  nearly  meet  the 
local  demand  and  nearly  9,000  short  tons  of  copper  ma- 
terials were  imported  in  1918.  This  had  increased  to 
14,583  short  tons  in  the  first  nine  months  of  1919.  The 
bulk  of  these  imports  come  from  Japan.  From  1915  to 
1917  Japan  bought  and  shipped  much  copper  from  China 
in  the  form  of  copper  coins.  These  were  refined  and  sold 
at  high  war  prices  by  the  Japanese,  but  a  resulting  shortage 
in  copper  coin  in  China  is  now  causing  her  to  import  cop- 
per ingots  and  slabs  from  Japan  for  minting. 

Ck)ld. — Gold  is  found  in  smajl  quantities  throughout 
China,  but  is  most  plentiful  in  northern  Manchuria  on  the 
border  of  Siberia  where  it  is  recovered  by  primitive  wash- 
ing methods.  The  best  gold  mine  in  China  is  in  Shantung 
Province.  Gold  mining  in  China  is  carried  on  almost  en- 
tirely by  individuals  who  gain  a  very  mean  livelihood  from 
their  occupation.  Many  thousands  of  gold  washers  prefer 
to  gain  a  bare  living  in  this  manner,  rather  than  engage  in 
a  more  lucrative  occupation,  being  constantly  drawn  by 
the  lure  at  some  time  of  an  exceedingly  rich  find  which, 
however,  fails  to  materialize. 

Silver,  Quicksilver,  Antimony,  and  Other  Minerals.— 
Silver,  quicksilver,  and  antimony  are  found  in  numerous 
provinces  of  China,  and  are  mined  to  some  extent  by 
foreign  and  Chinese-foreign  concessions,  established  before 
the  present  mining  laws  came  into  effect.    About  16,000 


82 


TRADING  WITH  ASIA 


INDUSTRIES  OF  CfflNA 


83 


tons  of  regulus  and  2,300  tons  of  crude  antimony  and  ore 
were  exported  in  1918.  Yunnan  Province  is  the  largest 
producer  of  tin  ore,  10,000  tons  being  exported  in  1918. 
Tungsten  ore  has  recently  been  found  in  great  quantities 
in  the  provinces  tributary  to  the  Canton  district,  and  about 
6,000  tons  were  exported  in  1918  principally  to  the  United 
States. 

Chinese  salt  wells  produced  350,000  tons  of  salt  for 
export  in  1918,  the  sun  drying  process  being  almost 
exclusively  used.  Rich  deposits  of  asbestos  have  been  lo- 
cated near  Antung  in  Manchuria.  Three  mines  are  now  in 
operation,  mostly  by  farmers  who  devote  their  spare  time  to 
gathering  asbestos  which  lies  near  the  surface.  Valuable 
deposits  of  lead,  zinc,  and  nickel  are  found  in  the  terri- 
tory between  the  Kwangsi  and  Yunnan  Provinces  of  South 
China.  The  German  firms  which  were  predominant  in  the 
lead  industry  before  the  war  have  lately  been  superseded 
by  Chinese.  In  1918  1,500  tons  of  lead  and  lead  ore  were 
exported.  China  produces  much  alum,  and  exported  2,700 
tons  in  1918. 

Petroleum. — Petroleum  has  been  found  in  the  four 
northern  provinces  and  also  in  Szechwan.  The  wells  are 
worked  with  rudimentary  machinery  and  the  production 
is  small.  The  Standard  Oil  Company  was  given  an  option 
in  1914  for  the  exploitation  of  certain  oil  resources,  but, 
due  to  the  doubtful  value  of  the  prospects  in  the  locations 
allotted,  the  options  were  allowed  to  expire  without  being 
taken  up.  On  the  expiration  of  the  options,  the  Standard 
Oil  Company  proposed  a  jomt  monopoly  with  the  Chinese 
Government  for  the  refining  and  transportation  of  all  crude 
oil  produced  in  China,  but  this  was  rejected. 

Manufacturing  Industries 

The  two  great  problems  which  must  be  solved  before  the 
fullest  realization  of  China's  potentialities  can  be  reached, 


are  transportation  and  unification  c^f  for^jgaJfttfixests.  In 
a  sense,  the  latter  is  the  keynote  to  the  present  Chinese 
situation.  Jealousies  and  fears  of  rival  interests  operate  to 
neutralize  all  effort  to  affect  any  substantial  reforms  look- 
ing toward  greater  production  and  higher  standards  for  the 
people.  The  resulting  backwardness  in  providing  suitable 
means  of  transportation  continues  to  divide  China  into 
provincial  water-tight  compartments.  Some  plan  must  be 
determined  upon  for  consolidating  these  rival  interests  and 
subordinating  their  ambitions  to  the  greater  benefit  of 
China. 

The  manufacture  of  articles  for  home  consumption  in 
China  made  rapid  strides  during  the  war  due  to  the  cut- 
ting off  of  the  Orient  from  foreign  sources  of  supply  by 
the  dislocation  of  shipping,  but  the  same  causes  have  inter- 
fered to  a  great  extent  with  China's  foreign  markets  for 
manufactured  articles,  so  that  the  net  result  has  been  a 
rather  drastic  change  in  China's  industrial  activities. 

The  Strawbraid  Industry.— The  strawbraid  industry 
yielded,  however,  only  7,000,000  pounds  for  export  in  1918 
as  against  13,000,000  pounds  in  1913 ;  nevertheless,  the  ex- 
ports showed  an  increase  in  value  of  from  $3,500,000  to 
$5,000,000.  Shantung  is  the  greatest  strawbraid  district 
in  China. 

The  Preparation  of  Proprietary  Medicines.— Medicines, 
mostly  of  the  proprietary  variety  for  Chinese  use  abroad, 
totaled  almost  $4,000,000  in  value  of  exports  for  1918 
against  only  $2,500,000  worth  in  1913. 

Paper  Manufacture.— About  $3,500,000  worth  of  paper 
of  Chinese  manufacture,  representing  30,000,000  pounds, 
was  exported  in  1918.  Some  of  this  paper  was  made  by 
crude  native  methods,  although  modern  paper  mills  at 
Hankow  and  in  Hunan  Province  contribute  largely  to  the 
total  production.  China  is  normally  a  large  importer  of 
news  print  paper,  and  the  development  of  the  mill  paper 


il 


84 


TRADING  WITH  ASIA 


i» 


i« 


industry  has  been  steadily  carried  on.  The  principal 
varieties  exported,  however,  are  for  various  domestic  uses 
and  **joss''  paper  for  Chinese  abroad. 

Firecrackers  and  Fireworki.— The  manufacture  of  fire- 
crackers  and  fireworks,  of  which  20,000,000  pounds  were 
exported  in  1913,  has  declined  to  a  volume  of  9,000,000 
pounds  in  1918,  due  principally  to  the  adoption  of  the 
**safe  and  sane''  Fourth  of  July  in  the  United  States,  al- 
though the  value  of  the  exports  has  remained  practically 
at  about  $2,500,000. 

Earthenware,  Pottery,  and  Chinaware.— Sixty-five  mil- 
lion pounds  of  Chinese  earthenware  and  pottery  were  ex- 
ported in  1913,  and  by  1918  the  character  of  this  export 
had  entirely  changed  to  chinaware,  of  which  12,000,000 
pounds  were  exported,  valued  at  about  $1,500,000  or  the 
same  as  the  earthenware  exports  of  five  years  before. 

Grass  Cloth. — Grass  cloth  used  in  the  manufacture  of 
grass  rugs  reached  a  total  export  value  of  $2,250,000  in 
1918,  or  about  double  the  value  in  1913,  although  in  quan- 
tity there  was  a  slight  decline  in  the  five  years. 

Cigarettes. — The  manufacture  of  cigarettes  has  made 
substantial  gains  since  1913,  increasing  the  exports  from 
one  million  to  four  million  pounds,  while  the  value  haa 
increased  ten  times  to  $2,500,000.  Modern  cigarette  man- 
ufacturing machinery  is  in  use,  and  the  principal  cigarette 
importing  firms  are  interested  in  the  manufacture.  As 
cigarettes  have  long  ranked  next  to  cotton  goods  as  the 
principal  item  of  import  the  full  development  of  the  indus- 
try is  not  entirely  reflected  in  the  export  statistics,  but  will 
be  rather  clearly  indicated  in  the  lessened  imports  in  the 
near  future  as  the  Chinese  factories  are  able  to  fill  the 
home  demand. 

Vermicelli  and  Macaroni. — The  manufacture  of  vermi- 
celli and  macaroni  for  domestic  use  has  steadily  increased, 
although  the  exports  in  1918  were  slightly  under  those  of 


INDUSTRIES  OF  JAPAN 


85 


_ 


1913  in  value,  and  only  three-fifths  of  the  earlier  year's  in 
quantity,  the  1918  figure  being  12,000  tons. 

Mats. — ^The  exportation  of  mats  ha»  remained  steadily  at 
20  million  pieces  in  1913  and  1918,  and  the  value  has  also 
remained  unchanged  at  $1,300,000. 

Leather  Goods. — On  the  other  hand,  leather  manufac- 
tures have  jumped  both  in  quantity  and  value  of  exports 
from  2,500,000  pounds,  valued  atr  $500,000,  in  1913  to  3,500,- 
000  pounds,  valued  at  $1,333,000,  in  1918. 

Varnishes. — Varnish  exports  have  also  experienced  a  de- 
cided impetus  in  the  five-year  period,  the  quantity  increas- 
ing from  1,800,000  pounds  to  2,300,000  pounds,  and  the 
value  from  $600,000  to  $1,200,000. 

Questions 

1.  How  does  China's  area  and  population  compare  with  that  of 

the   British   Empire,   and  the  United   States?    Name  the 
three  trade  zones  and  the  rivers  draining  each. 

2.  Discuss  the  Chinese  silk  trade,  and  state  the  reasons  for  its 

decline.     Name  three  important  vegetable  oils  exported. 

3.  Discuss  China's  tea  trade  and  reason  for  decline.    Discuss 

rice  production  and  trade. 

4.  What  is  the  present  extent  of  China's  cotton  industry  and 

future  possibilities?    Name  three  cereals  and  three  fibers 
produced  in  China. 

5.  What  is  the  importance  of  China's  egg  exports?    Name  three 

exports  of  pastoral  industries. 

6.  Name  the  principal  Chinese  coal  mines,  and  indicate  those 

under  foreign  control.    Where  are  the  chief  iron  ore  de- 
posits and  by  whom  are  they  controlled? 

7.  What  are  the  prospects  for  copper  mining  in  China?    How 

is  gold  mined  and  where? 

8.  Name  three  other  mineral  products,  indicating  the  location  of 

the  principal  deposits. 

9.  What  two  problems  must  be  solved  before  China  may  be  fully 

developed? 
10.  Name  five  manufacturing  industries  of  China,  and  comment 
on  the  growth  or  decline  of  each  as  evidenced  by  exports. 


CHAPTER  VI 

AGRICUnrURE,    MINING    AND    MANUFACTURING    INDUSTRHS    OF 

JAPAN 

The  Empire  of  Japan  consists  of  six  large  islands,  the 
peninsula  of  Korea,  and  about  600  smaller  islands.  The 
total  area  of  the  Empire  is  about  142,000  square  miles,  33 
per  cent  of  which  is  in  the  main  island  of  Hondo,  33  per 
cent  in  Korea,  and  11  per  cent  in  the  northern  island  of 
Hokkaido,  and  the  balance  distributed  among  the  smaller 
islands.  Two  chains  of  mountains  form  the  most  distinc- 
tive physical  feature  of  Japan,  one  extending  from  the  far 
north  in  Saghalien,  and  the  other  extending  from  the  main- 
land  of  China  through  Formosa  and  being  evident  in  the 
chain  of  islands  leading  to  the  island  of  Kyushu.  These 
two  mountain  chains  combine  in  the  center  of  the  main  is- 
land and  rugged  ranges  divide  the  main  island  into  two  nat- 
ural geographical  divisions  of  southern  and  northern  Japan, 
presenting  strict  contrasts  both  geographically  and  polit 
ically.  The  outer,  or  Pacific,  coast,  is  far  more  rugged  in 
outline  than  the  inner,  or  Japan  Sea,  coast,  due  to  the  prox- 
imity of  the  mountains  to  the  coast.  The  sea  on  the  Pacific 
side  is  very  deep,  while  that  on  the  Japan  Sea  coa.st  only 
gradually  attains  to  a  medium  depth.  The  inland  sea  is  in 
communication  with  the  outer  ocean  by  only  four  narrow 
straits.  There  are  many  excellent  harbors  on  the  Pacific 
sea  coast,  but  good  harbors  are  rare  on  the  Japan  Sea 
coast.  The  same  is  true  of  the  islands  of  Hokkaido  and 
Formosa,  the  harbors  in  Hokkaido  being  characterized  by 
the  presence  of  sand  dunes,  while  the  coast  of  Formosa  pre- 
sentsr  a  sharp  contrast  between  the  eastern  and  western 

86 


INDUSTRIES  OF  JAPAN 


87 


shores,  the  former  ending  abruptly  in  deep  water  and  the 
shore  facing  on  China  terminating  in  a  shelving  bottom  with 
many  shoals.  There  are  60  harbors  open  to  foreign  trade, 
the  most  important  being  Yokohama,  Kobe,  and  Osaka  on 
the  Pacific  Coast  of  the  main  island,  and  Niigata  on  the 
Japan  Sea  Coast,  which  is  the  port  of  transshipment  for 
Vladivostock.  Nagasaki,  on  Kyushu  Island,  Tamsui,  in 
Fbrmosa,  and  Fusan,  in  Korea,  are  the  important  ports. 
The  population  of  Japan  proper  in  1916  was  55,000,000,  or 
a  population  of  387  per  square  mile,  as  compared  with  33 
per  square  mUe  in  the  United  States. 

Agriculture 

Intensive  cultivation  of  the  land  by  human  labor  with 
the  use  of  crude  and  simple  implements  are  the  outstanding 
features  of  Japanese  agricultural  methods.     Horses  and 
oxen  are  rarely  seen,  and  most  of  the  burden  bearing  is 
done  by  men  and  women.    Eighty  per  cent  of  the  popula- 
tion  is  agricultural  and  the  average  size  of  the  farm  is 
two  and  one-half  acres.    Every  available  acre  of  land  is 
under  cultivation,  the  hillsides  being  terraced  so  that  the 
water  may  be  drained  from  the  top  fields  to  the  lower 
fields  and  in  this  way  used  many,  times  over  in  accordance 
with  regulations  which  are  strictly  adhered  to.    Japan  has 
no  special  legislation  on  land  holding,  the  average  length 
of  tenancy  being  10  or  12  years.     The  migration  of  the 
rural  population  toward  the  city  is  making  it  more  and 
more  difficult  for  the  landlords  to  find  tenants  on  any  terms 
and  rural  reorganization  has  become  an  important  economic 
problem.    The  difficulty  has  been  that,  under  the  present 
system,  only  a  bare  subsistence  is  allowed  the  farmer,  leav- 
ing no  surplus  with  which  to  elevate  the  standard  of  living 
or  to  contribute  to  their  general  culture.    As  a  result,  the 
national  wealth  is  stiU  comparatively  low.    But,  with  the 
high  prices  of  silk  abroad,  the  farmers  who  also  raise  their 


88 


TRADING  WITH  ASIA 


own  food  prospered  greatly  in  the  recent  past,  so  that 
new  capital  has  flooded  Japan  and  started  many  new 
enterprises.  The  agrarian  policy  of  Japan,  may  be  said 
to  be  that  of  increasing  the  area  of  land  per  capita  without 
decreasing  its  average  yield. 

Rice.— There  are  about  4,000  varieties  of  rice  plants  cul- 
tivated in  Japan  which  are  divided  into  three  main  varie- 
ties ;  those  maturing  in  the  early  spring,  those  in  the  middle 
summer,  and  those  in  the  late  fall.    The  average  yield  of 
rice,  which  is  the  staple  crop  and  foodstuff,  is  33  bushels 
per  acre,  although,  with  intensive  methods  in  sections,  this 
has  been  raised  to  40  and  sometimes  to  60  bushels.    The 
success  of  the  small  farmer  in  Japan  depends  largely  upon 
the  use  of  all  waste  material,  and  the  intensive  system  of 
cultivation  has  not  been  able  to  keep  pace  with  the  increas- 
ing population.     Japan  is  each  year  more  dependent  upon 
her  rice  imports.     The  per  capita  consumption  of  rice  in 
Japan  is  seven  bushels  per  year,  or  a  total  consumption  of 
371,000,000  bushels.     The  normal  rice  yield  for  the  past 
seven  years  has  been  little  over  265,000,000  bushels  per 
year,  to  which  Korea's  production  of  50,000,000  bushels 
and  Formosa's  22,000,000  bushels  must  be  added,  making 
a  total  rice  production  for  the  Japanese  Empire  of  337,- 
000,000  bushels,  so  that  Japan  is  already  dependent  upon 
Siam  and  French  Indo-China  for  a  large  share  of  her  most 
important  and  necessary  foodstuff. 

Barley  and  Wheat. — In  addition  to  the  production  of 
rice,  Japan  normally  produces  88,000,000  bushels  of  barley 
and  26,500,000  bushels  of  wheat.  These  crops  constitute 
the  staple  crops  in  the  upland  farms  where  the  nature  of 
the  land  makes  rice  cultivation  impracticable.  Barley  is 
now  very  generally  mixed  with  the  rice  throughout  Japan 
because  of  the  prevalence  of  beri-beri,  or  dropsy,  which  is 
caused  by  a  diet  of  pure  rice.  Barley  is  extensively  culti- 
vated in  the  northern  island  of  Hokkaido  for  brewing  beer. 


INDUSTRIES  OF  JAPAN 


89 


The  stalks  are  also  used  in  the  making  of  strawbraids  which 
are  exported  extensively.  Wheat  is  used  in  Japan  largely 
as  a  subsidiary  foodstuff  in  the  manufacture  of  macaroni 
and  confectionery  and  practically  no  bread  is  used  by  the 
majority  of  the  people. 

Other  Grains.— Fifteen  million  bushels  of  millet,  5,000,- 
000  bushels  of  buckwheat,  and  3,000,000  bushels  of  maize 
are  also  normally  produced.  The  millets  are  raised  in 
mountainous  districts  either  as  a  substitute  for  rice  or  in 
rice  producing  districts  after  the  planting  season  has 
passed,  or  if  rice  has  not  been  planted  because  of  adverse 
weather  conditions.  Millet  and  buckwheat  are  also  the 
ordinary  articles  of  diet  for  the  poorer  classes  in  rural  dis- 
tricts. Buckwheat  flour  is  used  extensively  in  the  manu- 
facture of  buckwheat  macaroni,  an  article  of  popular  diet 
in  Japan.  Maize  is  used  rarely  as  an  article  of  human 
food,  but  is  grown  extensively  in  Hokkaido  for  cattle  food. 

Beans  and  Potatoes. — Japan  annually  produced  18,000,- 
000  bushels  of  soya  beans,  4,000,000  bushels  of  red  beans, 
2,000,000  bushels  of  horse  beans,  and  2,000,000  bushels  of 
peas.  The  soya  bean  plays  a  very  important  part  in  the 
Japanese  dietary,  daily  articles  of  diet  for  all  classes  being 
soy,  a  sauce  brewed  from  the  soya  bean ;  miso,  a  paste  used 
in  soup  making;  and  tofu,  or  bean  curd,  which  is  used  in 
place  of  butter.  The  soya  bean  cake  is  a  very  valuable 
fertilizer  and  horse  food.  The  demand  for  soya  bean  in 
Japan  has  long  outstripped  the  supply,  and  an  immense 
quantity  of  beans  are  being  raised  by  the  Chinese  in  South 
Manchuria  and  sent  to  Japan  for  oil  extraction  and  ship- 
ment abroad.  Hokkaido  is  the  principal  center  of  soya 
bean  production  in  Japan.  The  red  beans  are  used  princi- 
pally for  making  Japanese  confectionery,  and  are  consid- 
ered a  great  delicacy  when  boiled  with  rice.  Each  year 
8,000,000  pounds  of  sweet  potatoes  and  2,000,000  pounds 
of  white  potatoes  are  produced  in  Japan.     Sweet  potatoes 


90 


TRADING  WITH  ASIA 


occupy  an  important  place  in  supplying  a  cheap  substitute 
for  rice  for  the  poorer  folk.  They  are  also  used  for  mak- 
ing starch  and  in  the  manufacture  of  alcoholic  drinks. 

Other  Crops.— Annually  37,000,000  pounds  of  leaf  in- 
digo,  100,000,000  pounds  of  leaf  tobacco,  16,000,000 
pounds  of  hemp,  6,000,000  pounds  of  rape  seed,  and  5,000,- 
000  pounds  of  cotton  are  among  the  other  leading  produc- 
tions of  Japan  proper.  Indigo  is  used  in  the  newly  devel- 
oped dye  industry  for  dying  cotton  piece  goods  for  export. 
The  tobacco  cultivation  is  under  the  protection  of  the  gov- 
ernment tobacco  monopoly,  which  supervises  production 
and  regulates  the  import  and  export  of  tobacco. 

Silk.— Sericulture  plays  almost  as  important  a  part  as  rice 
in  the  economic  scheme  of  Japan,  and,  indeed,  were  it  not 
for  the  profit  derived  from  this  subsidiary  occupation,  the 
average  Japanese  farmer  would  be  barely  able  to  maintain 
himself.     By  rearing  the  silk  worms  in  spring  and  autumn, 
the  income  of  the  farmer  is  doubled.     Sericulture  is  essen- 
tially a  household  industry  and  has  seldom  succeeded  when 
conducted  on  a  basis  of  large-scale  operations,  and  the  cheap 
labor  of  Japan  has  been  the  underlying  element  of  its  suc- 
cessful  development.     Through   strict   regulation   on   the 
part  of  the  Government,  the  diseases  of  the  silk  worm, 
which  have  caused  such  havoc  in  the  Chinese  industry,  have 
been  practically  eradicated.     About  80  per  cent  of  the  Jap- 
anese raw  silk  production  is  designed  for  coarse  yarns  for 
the  American  market.     The  Japanese  cocoons  are  as  yet 
lacking  in  uniformity  and  cannot  produce  the  finer  fila- 
ments which  are  at  present  supplied  by  France  and  Italy. 
The  Shinshu  district  in  Nagano  prefecture  is  the  lead- 
ing silk  district  in  Japan,  although  Koshu  and  Joshu  are 
noted  for  hand  reeling.     In  the  larger  districts  31  families 
usually  form  a  group  which  is  provided  with  a  common 
reeling  shop  where  silk  produced  by  each  family  is  com- 
bined into  one  large  hank  or  reel  and  sent  to  the  head 


INDUSTRIES  OF  JAPAN 


91 


establishment   of  the   district   where   they   are   carefully 
graded  according  to  luster,  number  of  defects,  and  strength 
and  sent  to  Yokohama  for  sale.    Japanese  women  are  much 
more  skilful  reelers  than  Chinese  and  produce  much  less 
waste  silk.    Japanese  total  production  of  raw  silk  for  1917 
was    56,000,000    pounds,    and    of    waste    silk    24,000,000 
pounds.    In  the  same  year  257,000  bales  of  silk  were' ex- 
ported, about  90  per  cent  to  the  United  States.     The  silk 
culture  in  Japan  has  been  afforded  the  fullest  and  most 
scientific  encouragement  on  the  part  of  the  Government, 
which  has  established  experiment  stations  for  investigating 
every  phase  of  silk  culture  from  the  growing  of  the  mul^ 
berry  trees  to  the  testing  of  the  finished  product  for  export. 
Under  the  stimulus  of  this  encouragement,  the  demand  for 
Japanese  silk  has  increased  tremendously  and,  as  the  price 
has  kept  pace  with  the  price  of  other  textiles  in  their  up- 
ward trend  during  the  war,  the  result  was  an  unpre- 
cedented profit  for  the  producer  of  Japanese  silk. 

Tea.— In  contrast  with  the  development  of  silk  culture  in 
Japan,  the  tea  industry  has  remained  almost  stationary, 
principally  because  of  the  formidable  rivalry  of  Ceylon 
and  Chinese  teas.  The  cost  of  production  is  higher  in 
Japan  than  in  India,  due  to  the  lack  of  labor  saving  appli- 
ances but,  because  of  their  peculiar  flavor,  Japanese  teas 
still  retain  a  strong  hold  on  the  American  market.  The 
main  tea  producing  district  of  Japan  is  Shizuoka,  although 
the  recuring  is  carried  on  in  Yokohama,  from  which  port 
and  from  Shimizu  most  of  the  tea  is  shipped.  In  1917 
87,000,000  pounds  of  tea  were  produced,  practically  all  of 
which  were  confined  to  four  grades  of  green  tea. 

Pastoral  Industry.— The  native  stocks  of  horses  in 
Japan  were  of  Mongolian  breed,  and  these  were  cross-bred 
with  Persian  horses  some  three  centuries  ago.  In  1917 
there  were  1,500,000  horses  in  Japan,  about  50  per  cent  of 
Which  were  of  native  breeds.    The  native  breeding  horses 


92 


TRADING  WITH  ASIA 


INDUSTRIES  OF  JAPAN 


93 


'  I 


are  usually  most  numerous  in  the  northern  part  of  the 
main  island  where  the  climate  makes  rice  culture  impos- 
sible.  In  Hokkaido,  where  agricultural  conditions  re- 
semble those  of  Canada  and  the  United  States,  horses  are 
most  numerous. 

Cattle. — Cattle  were  originally  used  in  Japan  solely  at 
beasts  of  burden  but,  as  in  the  case  of  horses,  the  native 
breed  is  gradually  disappearing  and  is  being  replaced  by 
imported  cattle,  mainly  from  Australia  and  from  England. 
The  raising  of  cattle  is  being  encouraged  by  the  Govern- 
ment largely  for  the  purpose  of  developing  the  tanning  in- 
dustry. The  total  number  of  cattle  in  Japan  in  1917  was 
1,300,000. 

Sheep. — The  great  difficulty  experienced  in  getting  a 
sufficient  supply  of  wool  from  Australia  during  the  war 
has  strongly  impressed  the  Japanese  Government  with  the 
necessity  of  encouraging  sheep  raising  at  home.  In  1918 
a  fund  was  provided  for  the  importation  of  1,500  sheep 
from  England  and  the  United  States,  which  were  to  be 
distributed  among  the  Government  stations  and  in  private 
pastures.  It  was  further  provided  to  import  1,000  sheep 
every  year  thereafter  and  to  take  steps  to  popularize  the 
sheep  raising  industry  among  the  native  farmers  as  a  sub- 
sidiary trade.  The  program  contemplates  making  Japan 
self-supporting  in  wool  in  10  years.  In  1917  there  were 
only  3,300  sheep  in  all  Japan. 

Poultry  Farming. — Poultry  farming  has  not  attained 
any  particular  development  and  Japan  has  been  dependent 
largely  upon  China  for  a  supply  of  eggs.  Only  1,150,000 
eggs  are  produced  annually.  An  import  tariff  on  eggs  was 
placed  in  1902,  and  this  has  gradually  been  raised  to  50 
per  cent.  The  Government  has  established  an  experi- 
ment station  near  Tokyo  where  imported  fowls  are  raised 
and  eggs  sold  at  cost  in  an  endeavor  to  encourage  the  home 
industry. 


Dairying  and  Meat  Preserving.— Dairying  is  insignifi- 
cant in  Japan,  as  the  Japanese  use  very  little  milk,  the 
soya  bean  providing  a  substitute  for  cooking  purposes  and 
bean  curd  a  substitute  for  butter.  With  the  advent  of  the 
European  some  fifty  years  ago,  the  use  of  butter  was  intro- 
duced, and  its  manufacture  is  now  carried  on  in  Hokkaido 
for  foreigners,  but  the  use  of  dairy  products  and  meat 
among  the  Japanese  is  small. 

Fruits. — Fruit  culture  has  recently  shown  a  marked  ac- 
tivity in  Japan.  Formerly  there  was  no  great  need  felt 
for  fruits  because  the  people  abstained  from  the  use  of 
meat.  With  the  increase  in  meat  eating  the  demand  for 
fruit  is  growing  and  orchards  have  been  planted  adjacent 
to  many  large  towns  and  on  hillsides  not  suitable  for  rice 
culture.  The  principal  fruits  are  persimmons,  which  are 
grown  extensively,  though  seldom  in  orchards;  plums, 
which  are  used  for  pickling  in  conjunction  with  native 
foods;  and  peaches.  The  famous  cherry  trees  of  Japan 
bear  no  fruit,  and  are  famed  only  for  their  flowers.  Fruit 
bearing  cherry  trees  are  being  cultivated  in  some  sections. 

Mines  and  Mining.— The  principal  mineral  production 
of  Japan  is  copper,  which  is  found  in  the  central  moun- 
tains of  the  main  island.  The  production  in  1916  was 
about  120,000  tons.  In  1917  494,000  tons  of  iron  were 
mined  and  26,000,000  tons  of  coal.  Also  225,000  troy 
ounces  of  gold  were  produced  and  7,500  tons  of  antimony. 
Other  minerals  are  silver,  lead,  manganese,  and  sulphur. 
The  present  coal  producing  districts  in  Japan  are  the 
northern  corner  of  the  island  of  Formosa  and  the  northern 
and  southwestern  section  of  Kyushu.  Korea  is  also  a  very 
important  coal  producing  state.  The  principal  coal  fields 
besides  these  are  in  Hokkaido.  The  future  development 
of  the  iron  mining  industry  in  Japan  must  take  place  in 
Manchuria  and  in  Korea,  as  the  iron  resources  of  the 


94 


TRADING  WITH  ASIA 


islands  are  very  limited.  Petroleum  is  found  in  Echigo 
Province,  although  the  supply  does  not  exceed  more  than 
half  of  the  total  demand  of  the  Empire. 

Fisheries.— The  fisheries  of  Japan  have  lon^'  been  one  of 
the    most    important    industries.     The    principal    marine 
products  are  herring,  sardines,  cuttle  fish,  and  mackerel, 
while  the  cultivation  of  oyster  beds  has  been  given  great 
attention  in  recent  years.     Seal  fishing,  which  was  formerly 
a  leading  industry  of  Hokkaido  and  Saghalieu,  has  recently 
been  prohibited  by  international  agreement.    The  canning 
of  crabs  and  other  shell  fish  has  in  recent  years  formed  an 
important   part   of  the   industrial  life  of  the   northern 
islands.    In  addition  to  the  fishing  in  Japanese  waters, 
much  revenue  has  been  obtained  from  fishing  in  neighbor- 
ing waters,  and  this  is  particularly  true  of  Russian  terri- 
tory, Canada,  and  California.    The  noted  whaling  grounds 
along  the  coast  of  Japan,  which  were  formerly  monopolized 
by  Russian  and  Korean  whalers,  are  now  almost  entirely 
in  the  hands  of  Japanese.     The  regulation  of  the  whaling 
industry  by  the  Government  and  the  limiting  of  any  single 
undertaking  to  thirty  boats  has  had  the  effect  of  encourag- 
ing the  industry  amonc:  a  large  class  of  individuals.     The 
use  of  motor  boats  and  steam  trawlers  has  been  a  great 
boon  to  the  development  of  the  Japanese  fishing  industry. 
Forests.— Fifty-four  per  cent  of  the  total  area  of  Japan 
proper  is  covered  with  forests.     Trees  grow  unusually  well, 
favored  by  a  temperate  climate  and  a  plentiful  supply  of 
moisture.    The  islands  of  Formosa  and  Kyushu  provide 
both  tropical  and  subtropical  species.     The  yield  of  Jap- 
anese forests  in  1915  was  valued  at  $18,000,000,  of  which 
$7,500,000   worth   was   cryptomerias  *   lumber,    $4,500,000 
worth,  pine,  and  $1,500,000  worth,  cypress.     The  main  use 
of  forest  products  in  industry  is  as  boards  for  tea  chests, 
railway  cross  ties,  and  match  sticks.    Japan  also  uses  200,- 
000  tons  of  wood  pulp  annually  in  the  manufacture  of 


INDUSTRIES  OF  JAPAN 


95 


paper  which  is  now  practically  all  provided  by  the  forests 
of  Hokkaido  and  Saghalien.  Formosa  is  the  world's  sup- 
plier of  camphor,  the  annual  yield  being  10,000,000  pounds. 

Manufacturing  Industries 

The  principal  manufacturing  industries  of  Japan  in 
point  of  capital  employed  are  (1)  the  electrical  industry, 
(2)  the  cotton  spinning,  (3)  the  gas  industry,  (4)  ship- 
building, (5)  machine  manufacturing,  (6),  the  paper  in- 
dustry, (7)  chemicals,  (8)  dyestuffs,  (9)  brewing,  (10) 
arts  and  crafts,  (11)  pottery,  (12)  lacquer,  (13)  celluloid, 
(14)  glass,  (15)  matches,  (16)  sugar,  and  (17)  miscellane- 
ous industries.  The  total  capital  invested  in  manufactur- 
ing at  the  end  of  1917  was  $535,000,000. 

The  Electrical  Industry.— The  presence  of  enormous 
horse  power  for  hydro-electric  developments  in  the  short, 
swift  streams  of  Japan  has  led  to  the  growth  of  the  elec- 
trical industry,  and  electricity  is  now  in  use  throughout 
most  of  the  communities  in  the  island.  In  1916,  472  sep- 
arate electrical  enterprises  were  supplying  power  with  a 
total  kilowatt  capacity  of  420,000.  The  surplus  capital 
which  has  flowed  to  Japan  from  high  silk  prices,  high 
freight  rates  and  war  production  has  led  to  a  boom  in  hy- 
dro-electric development  and  in  1917  497  enterprises  were 
listed  with  475,000  kilowatt  capacity,  and  82  others  with 
460,000  kilowatt  capacity  were  contemplated. 

The  Cotton  Spinning  Industry.— The  raw  cotton  used 
in  the  cotton  spinning  industry  comes  chiefly  from  India, 
the  United  States,  and  from  China,  the  short  staple  cotton 
of  India  and  China  being  mixed  with  the  long  staple  of  the 
United  States.  The  yams  produced  are  generally  of  the 
coarser  grades,  due  to  the  low  standard  of  living  in  Japan 
and  China,  the  principal  markets.  About  half  the  3,165,- 
000  spindles  are  producing  counts  of  28  and  below,  while  k 
third  are  producing  from  38-60  counts.    The  lack  of  uni- 


96 


TRADING  WITH  ASIA 


)  I 


fonnity  in  Japanese  spinning  is  gradually  disappearing 
with  the  formation  of  larger  mills  by  amalgamation.  Five 
large  companies  practically  control  the  colton  spinning 
business  of  Japan,  and  the  export  of  their  products  is  in 
the  hands  of  three  or  four  large  selling  agencies. 

The  Gas  Industry. — The  growth  of  hydro-electric  devel- 
opment has  gradually  encroached  upon  the  gas  industry, 
and  with  the  sharp  advance  in  the  price  of  gas-making 
materials,  with  rates  under  strict  Government  control  and 
consequently  inelastic,  the  result  has  been  a  gradual  de- 
cline of  the  industry.  The  growing  importance  of  the  by- 
products of  the  industry  such  as  coal  tar,  coke  and  am- 
monia have  tended  to  encourage  investors  somewhat,  but 
on  the  whole  the  outlook  for  the  industry  is  not  bright. 

Shipbuilding. — The  war  was  a  great  boon  to  Japanese 
shipowners  and  gave  a  decided  impetus  to  the  shipbuilding 
industry.  Even  the  scarcity  of  steel  plates,  for  which 
Japan  was  dependent  upon  the  United  States,  did  not  dis- 
courage Japanese  shipbuilders.  From  1913  to  1917  the 
steamer  tonnage  increased  from  1,513,000  gross  to  1,827,000 
gross,  and  the  sailing  tonnage  from  487,000  gross  to  696,000 
gross.  About  half  of  this  tonnage  was  home  built  and  half 
foreign  built.  Of  the  steamer  tonnage  1,700,000  tons  was 
of  steel  and  iron  construction.  Under  a  five-year  subsidy 
plan  $4,000,000  has  been  appropriated  for  European  steam- 
ship lines,  $6,500,000  for  North  American  lines,  and 
$700,000  for  South  American  lines.  In  1918  there  were  57 
shipyards  capable  of  building  ships  of  1,000  tons  or  over 
operating  on  a  total  paid-up  capital  of  $54,000,000.  In  the 
four  years  ending  in  1918  these  yards  built  233  vessels, 
representing  a  million  gross  tons  of  steamers  on  domestic 
and  foreign  orders.  In  1919  alone  137  vessels  totalling 
627,000  tons  were  scheduled  to  be  built. 

Cotton,  Silk,  and  Woolen  Weaving. — Considerable  ad- 
vance has  been  made  in  the  weaving  of  silk  goods  and  also 


INDUSTRIES  OF  JAPAN 


97 


in  the  manufacture  of  cotton  braids  and  piece  goods.  The 
woven  silk  goods  manufactured  in  Japan  are  known  as 
hahutae,  and  a  large  business  is  now  being  done  in  silk  and 
cotton  fabrics,  which  are  produced  annually  to  the  amount 
of  about  $18,000,000,  chiefly  for  consumption  at  home. 
The  woolen  industry  gained  an  impetus  during  the  war  be- 
cause the  Japanese  factories  were  called  upon  to  supply  the 
Russian  army  with  uniforms.  The  manufacture  of  muslin 
and  hemp  fabrics  is  also  carried  on  to  a  large  extent. 

Machine  Manufacturing.— The  Japanese  are  not  natu- 
rally skilled  mechanics,  and  their  delicate  physique  also 
acts  as  a  bar  to  their  complete  development  as  a  nation  of 
machine  builders.  In  the  manufacture  of  practically  every 
kind  of  modem  machinery  some  progress  has  been  made, 
particularly  in  dynamos,  water  wheels,  telephone  ap- 
paratus, weaving  machines,  cars  and  locomotives,  etc.  The 
development  of  the  industry  is  hampered  by  an  insufficient 
supply  of  iron,  lack  of  skilled  labor,  and  an  infant  industry 
striving  to  hold  its  own  against  strong  competition  from  the 
West.  With  no  foreign  markets  for  Japanese-made  ma- 
chines as  yet,  its  production  cannot  be  undertaken  on  a 
large  scale,  and  the  cost  of  production  is  consequently 
high. 

The  Manufacture  of  Paper.— The  manufacture  of  paper, 
both  news  print  and  Japanese  native  paper,  is  of  particu- 
lar importance  since  paper  is  used  in  Japan  for  a  great 
many  purposes  to  which  cloth  is  put  in  this  country.  The 
use  of  paper  handkerchiefs,  napkins,  and  in  some  rural  dis- 
tricts, paper  windows,  and  paper  doors  in  all  houses,  lend 
significance  to  this  industry.  The  large  amount  of  pulp 
formerly  imported  has  been  two-thirds  superseded  by  Jap- 
anese pulp  produced  in  Saghalien. 

The  Chemical  and  Dyestuflf  Industries.— The  develop- 
ment of  the  chemical  industry  has  gone  hand  in  hand  with 
the  development  of  the  gas  industry,  and  the  by-products 


98 


TRADING  WITH  ASIA 


li: 


such  as  coal  tar,  which  has  been  used  in  the  manufacture  of 
dyes,  have  furnished  a  valuable  source  of  raw  material. 
Aside  from  sulphur,  which  has  been  produced  in  large 
quantity,  the  chemical  industry  in  Japan  has  been  mostly 
dependent  upon  imports  of  crude  chemicals  from  abroad. 
Many  new  chemical  factories  were  started  during  the  war 
for  the  manufacture  of  glycerine,  sulphuric  acid,  and  bro- 
mine. Phosphorus  and  potassium  chlorate  for  matches, 
supplied  from  foreign  countries  until  a  few  years  ago,  are 
now  made  in  Japan.  Important  developments  in  electro- 
chemical industries  have  taken  place.  In  1917  2,500  fac- 
tories employing  141,700  persons  were  engaged  in  chemical 
manufacture. 

Brewing. — The  brewing  of  Japanese  wine,  sake,  and 
beer  and  the  manufacture  of  soy  have  been  carried  on  for 
some  years  in  Japan  and  four  large  breweries  now  supply 
the  total  demand  for  beer.  Soy  and  sake,  made  from  rice, 
are  manufactured  practically  throughout  the  islands,  al- 
though the  manufacture  of  beer  is  centered  principally  at 

Hokkaido. 

Arts  and  Crafts. — The  introduction  of  Buddhism  and 
its  wide  diffusion  marks  the  real  dawn  of  arts  and  crafts 
in  Japan  at  about  610  a.  d.  Wood  carving  had  attained  a 
very  high  level  of  perfection  in  700  a.  d.  and  metal  casting 
had  also  made  remarkable  progress  at  this  same  date,  as 
attested  by  the  Buddhist  image  at  Nara.  Printing  on  silk, 
largely  an  imitation  of  Chinese  style,  was  introduced  in 
800  A.  D.  The  effect  which  this  early  familiarity  with  wood 
carving  and  painting  has  had  upon  the  industrial  develop- 
ment of  Japan  is  quite  remarkable.  Even  the  introduc- 
tion of  Western  painting  since  1868  and  the  attempt  of 
the  Japanese  artists  to  adapt  the  Western  style  to  suit  the 
native  conditions  has  not  lessened  the  effect  which  this  long 
intimacy  with  these  arts  has  had  upon  the  deftness  and 
artistic  sense  of  the  Japanese. 


INDUSTRIES  OF  JAPAN 


99 


Pottery.— Since  ancient  times  Japan  has  excelled  in  the 
manufacture  of  pottery,  but  with  the  demand  for  cheaper 
grades  from  abroad  the  ancient  skill  of  Japanese  pottery 
manufacturers  has  been  sacrificed  to  the  commercialization 
of  the  industry.  The  production  of  pottery  in  Japan  in 
1916  was  valued  at  $13,000,000.  and  the  exports  at  $7- 
000,000. 

Lacquer  Wares.— The  manufacture  of  lacquered  wares 
has  increased  in  late  years,  due  to  the  large  demand  from 
abroad.  Trays,  cake  baskets,  cigarette  boxes,  and  bowls 
are  among  the  principal  articles  of  production  of  this 
industry.  Lacquered  wares  were  made  to  the  value  of 
$5,000,000  in  1916. 

The  Manufacture  of  Celluloid.— The  manufacture  of 
celluloid  from  camphor  has  gained  prominence  in  very 
recent  years  and  the  demand  of  the  celluloid  manufac- 
turers upon  the  Japanese  camphor  supply  has  led  to  seri- 
ous embarrassment  of  celluloid  manufacturers  in  this  coun- 
try who  depend  entirely  upon  Japan  for  their  supply  of 
camphor.  The  manufacture  of  celluloid  toys  to  replace 
those  formerly  supplied  by  Germany  has  gained  great  head- 
way during  the  war. 

The  Glass  Industry.— The  glass  industry  has  reached  im- 
portant proportions  during  the  war  and  much  of  the  glass 
trade  of  the  South  Seas  and  Far  Eastern  tropics  has  been 
diverted  from  Europe  to  Japan.  The  output  of  this  in- 
dustry was  worth  $8,000,000  in  1916.  The  center  of  the 
industry  is  in  Osaka.  Sheet  glass  and  plate  glass  and  glass 
tableware  are  the  chief  products. 

Matches.— Matches  were  produced  in  1916  to  the  extent 
of  50,000,000  gross,  41,000,000  of  which  were  exported. 
The  plentiful  supply  of  wood  and  sulphur  makes  the  match 
industry  of  Japan  a  particularly  profitable  one. 

The  Refining  of  Sugar.— The  refining  of  sugar  has 
reached  important  dimensions  in  Japan,  the  sugar  of  For- 


100 


TRADING  WITH  ASIA 


INDUSTRIES  OF  JAPAN 


mosa  being  brouprht  to  the  main  island  for  refining  and 
shipment  to  the  Chinese  markets. 

Other  Industries.— Flour  milling,  rubber  manufacture, 
the  manufacture  of  vegetable  oils,  straw  and  chip  braid, 
are  all  developments  of  the  last  few  years,  while  the  mat- 
ting industry,  in  which  Japan  formerly  excelled,  has  fallen 
off  somewhat,  due  to  Chinese  competition.  The  manufac- 
ture of  brushes  has  undergone  rapid  development,  the 
bristles  coming  from  China,  and  the  product  selling  in  the 
United  States  and  Europe. 

The  Future  of  Japanese  Industry. — In  the  present  eco- 
nomic development  of  Japan  the  necessity  for  developing 
her  manufacturing  industries  is  becoming  more  and  more 
apparent.  It  is  realized  that,  with  a  population  growing 
at  the  rate  of  600,000  per  year  and  with  no  suitable  lands 
to  which  this  population  may  emigrate,  the  only  economic 
salvation  of  Japan  is  in  becoming  a  strong  manufacturing 
nation.  While  the  low  standard  of  living  of  the  people 
would  seem  to  act  favorably  toward  this  development  by 
supplying  a  large  quantity  of  cheap  labor,  the  net  efficiency 
of  the  average  Japanese  laborer  is  estimated  to  be  from 
one-fourth  to  one-sixth  of  that  of  the  foreign  laborer. 
This  is  especially  true  in  those  newer  industries  which  have 
sprung  up  in  recent  years  and  in  which  the  Japanese  are 
not  favored  by  the  accumulated  knowledge  of  technique 
and  the  use  of  machinery  of  past  generations.  It  seems 
probable,  therefore,  that  the  development  of  Japanese 
industries  will  be  merely  along  such  lines  as  require  deft 
and  skilful  individual  work,  and  not  in  such  industries  as 
the  iron  and  steel  industry  which  depends  for  its  success 
upon  large-scale  production  and  heavy  manual  labor. 
While  efforts  are  being  made  to  make  Japan  self-sufficient 
in  many  lines  of  industrial  enterprise  and  while  the  war, 
by  shutting  off  the  Far  East  from  the  normal  channels 
of  trade,  had  a  tendency  to  foster  this  development,  it  is 


101 


thought  that  with  the  return  to  normal  conditions  many  of 
the  industries  which  have  sprung  up  in  Japan  during  this 
period  will  give  way  to  foreign  competition,  especially  in 
those  lines  where  the  foreign  manufacturers  are  favored  by 
long  experience  and  a  laboring  class  peculiarly  adapted  to 
the  industry  in  question.  Japan  has  a  distinct  place  to  fill 
in  the  industrial  world,  but  that  place  is  decidedly  not  in 
competition  with  large-scale  industries  which  have  been  suc- 
cessfully continued  for  many  years  in  Europe  and  in  the 
United  States. 

Korea 

Korea  was  annexed  to  Japan  in  1910  by  treaty  between 
the  two  nations.    It  is  now  administered  by  a  Japanese 
Governor    General.     The    total    population    of    Korea    is 
14,000,000,  of  which  only  2f0,000  are  Japanese  and  12,000 
foreigners.     Korea,  therefore,  has  not  proven  an  outlet  for 
the  surplus  Japanese  population,  the  standard  of  living 
being  lower  than  that  of  the  Japanese.     The  peninsula, 
therefore,  is  not  offering  an  attractive  field  for  colonization,' 
Agriculture  furnishes  occupation  for  80  per  cent  of  the 
people.     The    rudimentary    cultivation,    the    absence    of 
drainage  and  irrigation,  and  the  natural  indolence  of  the 
natives  are  the  main  drawbacks  to  the  agricultural  develop- 
ment of  the  peninsula.    But  56  per  cent  of  the  total  area  is 
fit  for  cultivation,  leaving  44  per  cent  which  ie  designated 
as  waste  land.    These  waste  lands  are  the  direct  result  of 
deforestation,  which  has  been   recklessly  carried  on   for 
many  years,  up  to  the  time  of  Japanese  possession.    Under 
Japanese  control  experimental  stations  have  been  estab- 
lished and  better  qualities  of  seeds  have  been  distributed, 
and  better  methods  of  agriculture  have  been  introduced  by 
the  establishment  of  model  farms.     Livestock  farming  has 
been  introduced  also,  and  cotton  planting  has  been  carried 
\  on  on  a  large  scale.    There  is  also  a  government  horticul- 


II 


f— = 


102 


TRADING  WITH  ASIA 


INDUSTRIES  OF  JAPAN 


103 


1 1 


tural  garden,  and  numerous  sericulture  stations  for  the  im- 
provement of  the  silk  crop. 

The  principal  products  are  rice,  wheat,  soya  beans,  gin- 
seng, cotton,  hemp,  and  tobacco.  The  raising  of  silk  and 
the  pastoral  industry  are  still  in  process  of  development. 

Eice.— The  yield  of  rice  is  about  50,000,000  bushels  an- 
nually, and  that  of  soya  beans  about  10,000,000  bushels. 
These  products  supply  the  domestic  consumption,  and 
leave  about  $3,000,000  worth  of  rice  and  $2,000,000  worth 
of  beans  for  export.  Annually  25,000,000  bushels  of  wheat 
and  barley  are  also  produced.  Among  the  other  crops  are 
10,000,000  bushels  of  millet  and  3,000,000  bushels  of  small 
red  beans. 

Cotton  Cultivation. — Since  1906  the  Japanese  Govern- 
ment has  made  every  effort  to  increase  the  production  of 
American  upland  cotton,  and  seeds  have  been  distributed 
broadcast  to  cultivators  since  1910.  The  results  have  been 
highly  satisfactory,  and  in  1918  250,000  bales  of  cotton 
out  of  102,000,000  pounds  production,  were  exported  to 
Japan.  Attempts  have  also  been  made  to  increase  the  cul- 
tivation of  tobacco.  Tobacco  growing  in  Korea  is  largely 
in  the  hands  of  Japanese  agriculturists. 

Fruits  and  Vegetables. — The  native  Koreans  have  paid 
very  little  attention  in  the  past  to  the  cultivation  of  fruits 
and  vegetables,  but  the  Japanese  have  recently  introduced 
pears,  apples,  and  grapes,  as  well  as  chestnuts  and  persim- 
mons. These  fruits  find  a  ready  market  in  Japan  proper, 
and  the  less  intensive  cultivation  of  Korean  soil  for  rice 
as  well  as  the  cooler  climate  add  to  the  growing  importance 
of  this  industry.  Ginseng  is  produced  in  large  quantities 
in  Korea  for  the  Chinese  market.  The  value  of  this  prod- 
uct, which,  among  the  Chinese,  is  supposed  to  have  ^'reat 
medicinal  value,  reaches  about  $1,500,000  annually;  the 
word  ginseng  meaning  **form  of  man,'*  and  is  derived  from 
the  resemblance  of  the  root  to  the  human  body.    This  fact 


undoubtedly  led  to  its  popularity  among  the  Chinese,  al- 
though its  medicinal  value  is  nil.  Beekeeping  is  carried  on 
throughout  Korea,  and  honey  as  a  substitute  for  sugar  has 
been  in  use  for  many  years. 

Silk  Cnlturc-Sericulture  is  still  in  a  very  backward 
state,  and  the  domestic  production  does  not  meet  the  de- 
mand, a  great  amount  of  silk  being  imported  from  China 
Formerly  very  little  attention  was  paid  to  the  choice  of 
eggs,  and  little  improvement  in  the  methods  of  rearing  was 
noted     Since   1910  improved  methods  have  been  intro- 
duced by  the  Japanese,  and  spinning  reels  and  looms  have 
been  distributed  by  the  Government  in  an  effort  to  stimu- 
late the  production  of  silk.    The  total  cocoon  crop   how- 
ever, amounts  to  only  100,000  bushels,  while  the  number  of 
families  engaged  is  only  111,000 

Pastoral  Enterprise.-Stock  farmmg  is  carried  on  as  a 
subsidiary  enterprise  by  a  great  number  of  farms,  the 
cattle  being  particularly  well  known  for  their  large  siz;  and 
good  quality,  a  great  many  of  them  being  exported  to 
Japan  and  Siberia.    Annually  5,000,000  pounds  of  hides 

cattle  600,000  swine,  40,000  horses,  and  3,000,000  fowls 
A  model  stock  farm  receives  an  annual  subsidy  from  the 
Oovemment  and  is  constantly  undertaking  to  improve  the 
breed  of  cattle.  The  Oriental  Development  Company  wa 
formed  m  Japan  in  1908  for  the  purpose  of  engaging  L 
agriculture,  undertaking  the  colonization  of  Korea  by  Jan 
anese  emigrants.  The  operations  of  this  company  have 
been  fairly  successful,  although  not  on  a  scale  anticipated 
by  Its  organizers. 

Whang -The  total  mineral  production  of  Korea  amounts 
to  about  $6,000,000,  of  which  gold  is  valued  at  $5,000,S 
The  other  minerals  of  importance  are  coal  and  iron  ^res 
bold  IS  now  mined  by  American  companies,  British    and 
Japanese.    Both  alluvial  and  quartz  deposits  are  M. 


104 


TRADING  WITH  ASIA 


INDUSTRIES  OF  JAPAN 


i 


the  introduction  of  the  land  dredge  in  the  American  mines 
being  particularly  successful. 

Fisheries.— The  seas  adjacent  to  the  Graham  Peninsula 
abound  in  marine  products,  which  are  exploited  mainly  by 
Japanese  fishermen.     Sardines,  sharks,  herring,  cod,  sal- 
mon, and  mackerel  are  the  principal  food  fish.    The  whale 
industry  is  carried  on  entirely  by  Japanese  fishermen  from 
the  first  of  October  to  the  end  of  April.    About  400  seals 
were  captured  yearly.    A  marine  product  of  much  impor- 
tance is  salt,  which  is  produced  to  the  extent  of  about  150,- 
000  tons  annually,  furnishing  a  livelihood  to  about  7,000 
people.    The  climate  of  Korea  being  dry  and  favorable  to 
rapid  evaporation,  the  industry  is  particularly  important. 
The  brine  is  pumped  from  wells  near  the  coast  and  allowed 
to  evaporate  in  the  sun.    Until  quite  recently  salt  was  ob- 
tained exclusively  in  Korea  by  the  boiling  process,  but  the 
salt  produced  in  China  by  evaporation  soon  made  it  neces- 
sary to  adopt  this  process  in  Korea  also. 

Forests. The  marked  difference  in  temi)erature  between 

the  north  and  south  of  the  peninsula  leads  to  a  wide  varia- 
tion in  forest  products.  In  the  extreme  south  box  trees, 
oak,  and  bamboo  are  the  principal  products ;  in  the  north- 
em  forests,  larch  and  pine  trees.  The  results  of  indiscrim- 
inate deforestation  have  been  noticed  in  the  frequency  of 
floods  and  the  bare  hillsides,  but  since  1911  seeds  and  young 
trees  have  been  planted  in  certain  districts  by  the  Jap- 
anese Government,  and  extensive  plans  have  been  made  for 
reforestation  in  many  of  the  worst  districts. 

Manufacturing  Industries.— Several  hundred  years  ago 
Korean  pewter  and  copper  goods  were  of  very  high  quality 
and  enjoyed  a  well  deserved  reputation,  but  in  recent  years 
these  industries  have  virtually  ceased  to  exist.  Some  of  the 
industries  which  have  been  undertaken  under  Japanese  rule 
are  printing,  brick  manufacture,  and  brewing.  At  the 
present  time,  however,  the  industrial  development  of  Korea 


105 


is  largely  in  the  household  or  domestic  stage,  and  many 
families  still  carry  on  crude  weaving  and  the  manufacture 
of  earthenware.     There   are  600   households   engaged   in 
earthenware  manufacture,  but  their  products  do  not  enter 
into  the  exports  of  the  peninsula.     Colored  paper  for  ex- 
port to  China  is  one  of  the  important  products  of  Korea. 
This  is  made  according  to  native  methods.    Metal  products 
such  as  pots,  pans,  and  braziers,  and  iron  tools  for  agricul- 
ture and  building  are  produced  in  small  quantities.     The 
hand  weaving  of  cotton,  hemp,  and  silk,  amounting  to  about 
2,000,000  dollars,  is  a  subsidiary  occupation  of  the  farmers. 
Tissue  manufacture,  however,  is  crude  and  the  product  does 
not  enter  into  the  export  trade,  since  the  production  is  not 
enough  to  supply  the  home  demand.     The  custom  which  re- 
quires long  periods  of  mourning  and  that  the  mourners 
dress  in  white  cotton  has  led  to  a  very  great  demand  for 
white  cotton  fabric,  and  this  is  imported  from  Japan  and 
England  to  the  amount  of  about  $3,000,000  annually. 

The  occupation  of  Korea  by  Japan  has  had  the  effect  of 
emphasizing  certain  very  fundamental  economic  laws.     In 
the  first  place,  Japanese  emigrants  have  had  no  desire  to 
compete  with  the  lower  standard  of  living  which  they  have 
encountered  in  Korea,  and  have  turned  their  attention  to 
South  America  and  Mexico,  where  there  is  more  opportun- 
ity for  them  to  improve  their  condition.    In  the  second 
place,  the  Koreans  themselves  have  shown  little  disposition 
to  be  improved  by  Japanese  governmental  regulations,  and 
their  past  history  as  a  hermit  nation,  shut  off  from  foreign 
intercourse,  has  made  them,  as  a  people,  peculiarly  impervi- 
ous to  suggestions  or  innovations  from  outside.    The  eco- 
nomic reforms  and  progress  which  have  been  made  under 
Japanese  rule,  therefore,  are  largely  on  the  surface  and  do 
not  extend  very  far  into  the  economic  structure  of  the  peo- 
ple.   In  a  way  this  experiment  in  colonization  has  taught 
the  Japanese  that  it  is  sometimes  more  difficult  to  conquer 


ll 


jQg  TRADING  WITH  ASIA 

a  passively  inactive  people  than  to  undersell  and  underbid 
the  labor  of  a  higher  civilization  than  their  own. 

Formosa 
The  Island  of  Formosa  was  ceded  to  Japan  by  China  in 
1895,  together  with  the  Pescadores,  a  chain  of  64  islands 
extending  from  the  mainland  to  Formosa.    The  climate  of 
Formosa  though  tropical  is  somewhat  more  temperate  than 
most  districts  in  this  same  latitude;  its  chief  *«™f'^"«^«' 
being  a  comparatively  long,  hot  season  from  May  to  Oct<^ 
her  with  a  very  plentiful  rainfall  during  the  summer  and 
'all  and  many  severe  storms.    Inl91«  the  popul^ion 
numbered  3,300,000,  of  which  14,000  were  f^ve^e^.^^^ 
is  an  increase  of  not  quite  50  per  cent  over  the  total  popula- 
tion in  1900.    There  are  11  large  cities  in  Formosa  each 
with  a  population  of  over  10,000,  the  largest  being  Ta.hoku 
Ind  the  second  Tainan.    The  chief  port  is  Tamsui.    The 
sou  of  Formosa  is  extremely  fertile,  and  rice,  sugar  cane 
tea,  sweet  potatoes,  indigo,  and  jute  are  produced  in  great 
abundance,  particularly  in  the  western  sec1.oa  of  the  Is- 
land    The  eastern  and  central  sections  of  the  Island  are 
In  undeveloped,  the  latter  being  still  inhabited  by  several 
thousand  head-hunters,  whom  Japan  has  made  every  effort 

to  bring  under  control. 

BSe.-Fifty.five  per  cent  of  the  entire  land  under  culti- 
vation is  planted  in  rice,  and  two  harvests  are  the  rule 
Itre  proper  irrigation  is  afforded.  The  .Production  ^^^ 
dee  had  increased  from  15,000,000  bushels  m  1900  to  22  - 
000,000  bushels  in  1911 ;  an  increase  of  about  46  per  cent 
Formerly  Formosan  rice  was  exported  to  foreign  countries, 
but  the  demand  from  Japan  proper  has  been  so  great  in 
recent  years  that  this  trade  has  practically  ceased 

Sui^-The  raising  of  sugar  in  Formosa  dates  from  the 
sixtee^h  century,  when  the  Island  was  under  the  influence 
of  the  Dutch,  and  the  manufacture  of  sugar  was  carried 


INDUSTRIES  OF  JAPAN 


107 


on  in  a  crude  way.  Sugar  has  grown  best  in  the  southern 
half  of  Formosa,  and  since  the  cession  of  the  island  to 
Japan  the  manufacture  of  sugar  has  become  a  very  prom- 
ising industry.  The  production  of  sugar  increased  from 
800,000  tons  in  1902  to  2,600,000  tons  in  1911.  Practically 
all  of  the  sugar  is  exported  to  Japan  in  crude  form  and 
there  refined. 

Tea.^Tea  is  chiefly  grown  in  the  northern  part  of  the 
Island  of  Formosa,  about  66,000  tons  being  produced  an- 
nually. It  is  exported  principally  from  the  port  of  Tamsui. 
The  famous  Oolong  tea  is  the  product  of  Formosa.  About 
$12,000,000  worth  is  exported  annually.  There  are  four 
grades  of  tea,  maturing  in  the  spring,  summer,  autumn,  and 
winter.  The  most  important  of  these  are  the  grades  matur- 
ing in  the  spring  and  summer,  constituting  over  two-thirds 
of  the  total  product. 

Other  Crops.— Sweet  potatoes  are  the  most  important 
foodstuff  next  to  rice  in  Formosa.     The  annual  yield  of  the 
two  crops  amounts  to  500,000  tons.    Beans  are  cultivated  in 
large    quantities    for   oil    extracting   purposes,    the    yield 
amounting  to  800,000  bushels.     Soya  beans,  peas,  and  pulse 
are  grown  generally.     Over  15,000  tons  of  indigo  have  been 
produced,  but  due  to  the  rapid  growth  of  the  coal  tar  dye 
industry  the  production  of  indigo  has  fallen  off.     China 
grass  and  jute  for  weaving  purposes  are  other  important 
crops,  the  former  being  used  in  the  manufacture  of  grass 
rugs,  and  the  latter  for  the  making  of  burlap.     Numer- 
ous kinds  of  rushes  are  also  grown  for  various  weaving  pur- 
poses. 

The  Pastoral  Industry.-Stock  farming  is  still  in  a  very 
undeveloped  state.  The  chief  domestic  animals  are  the 
water  buffalo  and  the  zebu,  both  of  which  are  used  for  till- 
ing the  soil  and  as  beasts  of  burden.  In  recent  years  su- 
perior breeds  of  cattle  and  swine  have  been  imported  from 
abroad,  and  the  Government  has  endeavored  to  encourao.e 


i 


108 


TRADING  WITH  ASIA 


' 


stock  fanning.    There  are  practicaUy  no  horses  in  For- 
mosa  and  very  little  poultry. 

Forestry.—About  64  per  cent  of  the  entire  area  of  the 
Island  is  covered  with  a  luxuriant  growth  of  conifers,  broad- 
leaved  trees,  and  bamboos.     In  the  mountainous  districts, 
which  extend  through  the  center  of  the  Island  from  north 
to  south,  there  are  large  virgin  forests.    In  some  sections 
deforestation  under  Chinese  rule  has  caused  much  damage, 
but  the  Japanese  Government  is  endeavoring  to  remedy  this 
evil  by  wide  spread  planting  of  trees.    Camphor  trees 
abound  in  all  sections  of  the  Island,  and  camphor  oil  is  man- 
ufactured in  the  northern  districts.     In  order  to  protect  the 
camphor  trees  from  rapid  exhaustion,  the  purchase  and  sale 
of  camphor  and  camphor  oil  was  made  a  government  monop- 
oly  in  1899,  and  the  reforestation  of  camphor  forests  is  now 
being  undertaken  by  the  Government.    About  6,000,000 
pounds  of  camphor  and  7,000,000  pounds  of  camphor  oil 
are  produced  annually,  the  great  bulk  of  which  is  now  man- 
ufactured into  celluloid  in  Osaka,  although  about  30  per 
cent  of  the  total  output  is  allotted  to  celluloid  manufactur- 
ers in  the  United  States  by  the  Government.    During  the 
period  of  the  war  the  value  of  all  food  crops  increased  to 
such  an  extent  that  the  cutting  of  camphor  became  unprofit- 
able and   a  great   many  of  the   natives   abandoned   the 
industry.     The  result  was  a  decided  decrease  in  produc- 
tion, and  in  the  proportion  allotted  to  manufacturers  in 
this  country. 

Fisheries.— Fisheries  are  located  principally  on  the  west- 
em,  or  Pacific,  coast,  and  are  not  of  an  important  nature. 
The  principal  catches  are  sardines,  mullet,  and  shark,  the 
shark  fins  being  a  great  delicacy  in  the  Chinese  market. 
Salt  is  produced  by  a  natural  evaporation  of  sea  water  at  a 
very  small  cost,  and,  under  favorable  climatic  conditions, 
the  production  of  salt  on  the  southern  and  western  coasts 
is  quite  large.    Annually  75,000  tons  are  produced. 


} 


INDUSTRIES  OF  JAPAN 


109 


Coal,  (Jold,  Sulphur  and  Other  Minerals.— The  principal 
mineral  production  is  coal.  Petroleum  also  promises  to  be- 
\  come  an  important  product  in  the  future.  Sulphur  de- 
posits are  located  along  the  volcanic  beds  of  mountains  in 
the  north.  Gold  occurs  in  veins  and  in  alluvial  deposits. 
Blanufacturing.— Manufacturing  is  confined  almost  en- 
tirely to  the  making  of  domestic  utensils  and  agricultural 
implements  of  a  crude  nature.  Practically  all  of  the  man- 
ufactured goods  required  are  imported  from  Japan  proper. 

Saghalien 

The  southern  half  of  the  Island  of  Saghalien  was  ceded 
to  Japan  by  Russia  after  the  Russian-Japanese  war  in 
1905.    High  cliffs  compose  the  whole  coast  line  and  good 
anchorages  are  rare.    The  port  of  Odomari  presents  the 
best  anchorage  on  the  Island.     The  seas  are  frozen  from 
November  to  April,  and  coasting  service  is  almost  entirely 
suspended  during  those  months.     The  Island  is  also  fre- 
quently enveloped  in  dense  fogs.     The  population  is  30,000, 
of  which  28,000  are  Japanese  and  2,000  Russians.    About 
one-half  of  the  population  is  engaged  in  fishery  and  one- 
half  in  agriculture,  which  are  the  only  important  industries. 
The  herring  fisheries  are  the  most  profitable.     The  great- 
est catches  occur  far  off  the  western  coast.     The  use  of 
nets  is  not  allowed  within  certain  distances  from  the  main- 
land, aiid  stringent  regulations  are  enforced  to  protect 
the  fishing  grounds.    Trout  and  salmon  are  next  in  impor- 
tance to  herring,  while  cod  fishing  has  reached  a  very 
profitable  basis  in  the  last  few  years.    About  26,000  cans  ] 
of  crabs  are  shipped  annually  from  Saghalien  through 
Japan  proper  to  the  United  States.    The  total  value  of  the 
catch  of  all  fish  amounts  to  about  $3,000,000.    The  larger 
quantity  of  herring  is  sent  to  Japan  as  fertilizer. 

Porestry.—Rich  forests  cover  about  80  per  cent  of  the 
area  of  Japanese  Saghalien,  and  most  of  these  have  never 


M 


110 


TRADING  WITH  ASIA 


been  touched  by  man.  The  conifers  are  used  mainly  for 
building  purposes  and  mining.  They  are  also  an  important 
contribution  to  the  pulp  supply  for  Japanese  paper  manu- 
facture. The  broad-leaved  trees  are  used  in  Japan  proper 
for  the  manufacture  of  wood  shavings  and  matches.  Tur- 
pentine, resin,  wood  spirit,  tar,  and  pitch  are  also  obtained 
from  these  forests. 

Since  the  occupation  of  Saghalien  by  Japan,  the  produc- 
tion of  agricultural  crops  has  greatly  increased.  The  sparse 
population  of  Russian  exiles  had  done  little  toward  agri- 
cultural improvement  of  the  land.  Annually  45,000  bush- 
els of  oats  and  15,000  bushels  of  barley,  together  with  4,000 
tons  of  potatoes  and  400  tons  of  hay  are  now  produced. 
There  are  about  1,000  horses,  1.000  cattle,  and  about  500 
swine  on  the  Island. 

Fisheries  and  Mining. — Herring  fishing  is  the  principal 
industry  of  the  Island.  The  principal  mineral  product  of 
Saghalien  is  coal  of  a  very  good  quality  and  in  great  abun- 
dance, the  seams  being  not  only  regular  but  very  thick, 
extending  for  some  60  miles  in  the  northern  part  of  the 
Island,  and  from  one  to  three  miles  wide.  Alluvial  gold  is 
found  in  the  beds  of  some  of  the  rivers,  but  not  in  very 
great  abundance.  Limestone  is  obtained  in  large  quantities, 
as  well  as  granite  and  marble.  Iron  pyrites  and  gold  are 
of  minor  importance. 

Questions 

1.  What  is  the  agrarian  policy  of  Japan?    How  has  the  devel- 

opment of  industries  affected  this  policy  f 

2.  Discuss  Japan's  rice  production.    How  are  wheat  and  barley 

used? 

3.  Describe  the  place  of  the  soya  bean  in  the  Japanese  diet. 

4.  Discuss  the  Japanese  silk  industry  giving  reasons  for  its  suc- 

cess. 

5.  What  are  the  principal  mineral  productions  of  Japan? 

6.  What  part  do  Japanese  fisheries  play  in  national  economy? 

Forests? 


INDUSTRIES  or  JAPAN 


111 


7.  Name  the  five  principal  industries  in  order  of  their  im- 

portance. 

8.  Where  does  Japan  obtain  her  raw  cotton  and  where  are  the 

principal  markets  for  Japanese  cotton  yam? 

9.  Discuss  the  Japanese  shipbuilding  development  during  the 

war. 

10.  What  general  considerations  affect  the  development  of  Japan 

as  a  manufacturing  nation? 

11.  Describe  the  agricultural  development  of  Korea. 

12.  Discuss  three  principal  agricultural  products. 

13.  Why  has  Japanese  colonization  of  Korea  been  unsuecessfolf 
14  Discuss  the  three  principal  crops  of  Formosa. 

15.  What  are  the  resources  of  Saghalien? 


( 


M 


ii 


lit 


^1 


CHAPTER  VII 

CREDIT  METHODS  AND  MARKET  ANALYSIS  OP  CHINA  iND  JAFAIT 

China 

The  general  manner  of  trading  with  China  is  the  same  as 
that  employed  in  other  parts  of  the  world,  but  the  chief  dis- 
tinction between  the  China  trade  and  that  of  other  coun- 
tries lies  in  the  details  and  methods  used  in  the  local  dis- 
tribution of  goods  and  the  financing  involved.  The  foreign 
merchant  never  comes  in  contact  with  the  real  purchaser  of 
the  goods,  partly  because  of  the  language  difficulty  and 
partly  because  of  the  strongly  organized  guild  and  compra- 
dore  system  of  merchandising.  Until  early  in  the  nine- 
teenth century  all  foreign  trade  was  carried  on  through  13 
hong  merchants  at  Canton,  who  were  nothing  more  than 
brokers.  Their  transactions  extended  to  both  the  selling  of 
Chinese  products  to  the  foreigner  and  the  purchase  of  for- 
eign goods  for  the  interior  merchants.  Their  monopoly 
of  the  trade  was  obtained  by  bribing  the  local  officials  at 
Canton.  When  trade  was  opened  with  other  ports  by 
treaty,  the  foreign  merchants  who  had  established  connec- 
tions with  these  hong  merchants,  and  who  had  no  way  of 
judging  the  standing  of  the  individual  interior  merchants, 
continued  to  deal  through  brokers  of  other  ports  such  as 
Shanghai,  Foochow,  Amoy,  and  Tientsin,  whom  they  em- 
ployed to  handle  the  credit  end  of  their  businesses  and  to 
whom  they  gave  the  responsibility  of  guaranteeing  and 
enforcing  payments  on  sales  of  foreign  merchandise  and  of 
enforcing  delivery  of  Chinese  produce  which  they  had 
bought.    These  men  came  to  be  known  as  compradores, 

112 


MARKET  ANALYSIS 


113 


and  the  compradore  system  is  in  effect  in  China  to  the 

present  day. 

Exchange  and  the  Compradore  System. — The  real  ne- 
cessity for  the  compradore  system  in  Chinese  merchandising 
is  bound  up  in  the  subject  of  exchange.  The  local  dealer 
buys  his  goods  on  a  silver  basis.  The  foreign  importer 
wishes  to  sell  his  goods  on  a  gold  basis  in  order  to  be  re- 
lieved of  exchange  considerations.  Of  course,  the  local 
foreign  banks  in  China  perform  a  useful  function  here  in 
selling  exchange  * 'forward'*  and  their  expert  knowledge  of 
finance  and  the  silver  market  permits  them  to  do  so  with 
considerable  profit,  but  occasional  loss.  But  the  exchange 
factor  permits  the  broker  to  perform  a  very  valuable  part 
in  the  transaction.  S.  R.  Wagel  in  his  Finance  in  China 
describes  the  following  transaction  as  a  case  in  point : 

The  (local  Chinese)  merchant  says  to  the  dealer  (broker)  in  the 
treaty  ports  that  he  wants  to  buy  so  many  pieces  of  cloth  at 
so  much  per  piece.  The  dealer  goes  to  the  foreign  merchant 
and  makes  inquiries.  The  foreign  merchant  gives  his  price  in 
sterling,  i.e.,  a  total  of  the  manufacturer's  cost,  freight,  insurance, 
and  other  costs  together  with  a  certain  profit  for  himself.  The 
dealer  calculates  on  selling  the  Chinese  merchant's  silver  at  a 
certain  exchange  quotation  of  a  rate  being  furnished  by  the  bank 
at  the  period  when  the  goods  will  be  delivered,  and  arrives  at 
the  amount  of  silver  he  will  have  to  pay.  If  this  price  is  less 
than  the  price  offered  by  the  merchant  who  wants  that  quantity 
of  goods,  he.  at  once  settles  the  bargain  with  the  foreign  merchant 
and  tells  the  Chinese  merchant  that  such  and  such  goods  will 
be  delivered  to  him  on  payment  of  a  certain  amount  (in  silver) 
at  the  due  date. 

In  some  instances  the  dealer  in  the  large  port  may  have 
different  ideas  about  how  silver  will  react  in  the  next  four 
months  required  for  delivery  of  the  goods  than  has  the  bank 
and  may  desire  to  take  a  chance  on  silver  being  higher  (and 
gold  being  lower,  consequently)  than  the  rate  quoted  by 
the  bank.    In  such  a  case  he  will  close  the  deal  without 


I 


'"> 


I* 


114 


TRADING  WITH  ASIA 


selling  forward  the  silver  which  the  local  Chinese  mer- 
chant contracts  to  turn  over  in  exchange  for  the  goods,  and 
if  he  is  lucky  and  silver  goes  up,  he  makes  an  additional 
profit,  which  the  bank  otherwise  would  have  taken  for  as- 
suming a  similar  risk.  The  reason  the  banks  can  **  specu- 
late** in  this  way  is  because  they  both  buy  and  sell  silver 
forward  in  large  quantities  every  day  to  cover  import  and 
export  transactions,  and  the  only  real  risk  they  assume  is 
on  the  difference  between  their  total  purchases  and  their 
total  sales,  which  combined  with  their  superior  knowledge 
of  the  general  financial  situation  makes  them  assume  less 
risk  than  is  assumed  by  a  dealer  who  perhaps  stakes  his 
fortune  on  a  single  gamble  in  the  future  price  of  silver. 

Guilds  in  Export  and  Import  Trade.— Guilds  in  China 
play  a  greater  part  in  the  export  trade  than  they  do  in  the 
import  trade.  The  silk  and  tea  guilds,  for  instance,  are 
effective  bodies  for  regulating  the  quality,  quantity,  and 
price  of  these  commodities,  and  while  their  rules  apply 
principally  to  domestic  affairs,  their  influence  upon  foreign 
trade  is  very  potent.  This  is  especially  true  in  the  regula- 
tion which  the  guilds  maintain  over  the  commercial  morals 
of  their  members.  Much  of  the  proverbial  honesty  of  the 
Chinese  merchant  is  due  more  to  rigid  guild  supervision 
which  he  cannot  evade  than  to  any  inherent  qualities,  for 
Chinese  are  only  human.  But  even  at  that  there  is  noth- 
ing in  guild  control  which  prevents  a  member  from  taking 
full  advantage  of  any  contract  which  he  may  have  been  suc- 
cessful in  persuading  the  other  party  to  sign,  and  the  rule 
of  caveat  emptor  is  perhaps  more  eloquently  applied  in 
China  than  in  any  other  part  of  the  world. 

Cotton  Goods. — China's  principal  import  is  cotton  goods, 
and  in  1918  $180,000,000  worth  of  this  commodity,  repre- 
senting 27  per  cent  of  China's  total  import  trade  of  $662,- 
000,000,  was  brought  through  the  Maritime  Customs. 
While  this  showed  a  gain  of  $28,000,000  in  value  over  the 


MARKET  ANALYSIS 


115 


cotton  goods  imports  of  1913,  in  actual  volume  there  was  a 
decrease  of  from  50  per  cent  to  75  per  cent.  This  was  due 
largely  to  the  establishment  of  looms  in  China.  In  the  sin- 
gle item  of  Indian  cotton  yarns  the  volume  fell  off  from 
177,000,000  pounds  to  48,000,000  pounds  in  the  five  years, 
while  the  value  decreased  only  from  $26,000,000  to  $19,- 
000,000.  In  Japanese  yarns  the  volume  decreased  from 
173,000,000  pounds  to  99,000,000  pounds,  but  the  value  actu- 
ally rose  from  $23,000,000  to  $42,000,000.  Japanese  cotton 
cloth  showed  a  large  gain  during  the  five-year  period  from 
13,000,000  yards  to  83,000,000  yards  and  a  corresponding 
increase  in  value  from  $600,000  to  $7,000,000.  Japanese 
plain,  gray  shirtings  showed  an  actual  decrease  in  volume 
from  3,000,000  to  2,000,000  pieces,  and  a  doubling  in  value 
from  $7,000,000  to  $13,000,000.  The  war  cut  the  import  of 
English  white  shirtings  from  4,500,000  pieces  to  1,500,000 
pieces,  although  high  prices  held  the  actual  value  decrease 
to  about  $3,000,000  under  the  1915  figure  of  $14,000,000. 
Although  Japanese  jeans  increased  from  86,000  pieces  to 
1,900,000  pieces,  the  value  increased  in  even  greater  propor- 
tion, from  $200,000  to  $10,000,000.  English  plain,  gray 
shirtings  were  reduced  from  4,000,000  pieces  to  690,000 
pieces,  and  the  value  reduced  from  $9,000,000  to  $4,000,000, 
while  Japanese  plain,  gray  shirtings  increased  five  times  in 
volume  to  940,000  pieces,  while  the  value  increased  ten 
times  to  $5,000,000. 

Metals  and  Minerals. — The  total  imports  under  this  head 
more  than  doubled  in  value  from  1913  to  1918,  the  figures 
for  the  two  dates  being  $21,000,000  and  $45,000,000,  respec- 
tively. Copper  ingots  and  slabs  represented  $5,000,000 
of  the  1918  total,  a  gain  of  $1,000,000  during  the  period. 
This,  however,  represented  a  falling  off  of  about  10,000,- 
000  pounds  from  the  1913  figure  of  26,000,000  pounds. 
Tinned  plates,  which  also  decreased  in  volume  from  48,- 
000.000  pounds  to  42,000,000  pounds,  increased  in  value 


I 


116 


TRADING  WITH  ASIA 


almost  threefold,  or  from  $1,700,000  to  $5,000,000.  The 
imports  of  new  iron  and  mild  steel  bars  and  sheets  and 
plates  were  each  worth  $3,800,000,  a  threefold  increase  in 
value  and  they  also  showed  a  one-third  decrease  in  volume, 
falling  from  79,000,000  pounds  to  51,000,000  pounds,  and 
from  47,000,000  pounds  to  30,000,000  pounds,  respectively. 
In  the  case  of  pipes  and  tubes,  of  which  the  value  was  also 
$3,800,000  in  1918,  there  was  a  fivefold  increase  in  volume 
over  1913,  from  8,000,000  to  38,000,000  pounds,  and  a  12 
times  increase  in  value.  The  imports  of  bamboo  steel,  steel 
bars,  hoops,  sheets,  and  plates  showed  a  substantial  increase 
in  volume  from  18,000,000  pounds  to  25,000,000  pounds 
and  an  even  greater  increase  in  value  from  $500,000  to 
$3,000,000.  Nails  and  rivets  doubled  in  value  from  $1,- 
000,000  to  $2,000,000,  while  the  volume  of  44,000,000 
pounds  imported  in  1913  dropped  25  per  cent.  Rails 
showed  an  increase  in  volume  from  39,000,000  pounds  to 
44,000,000  pounds  and  a  fourfold  increase  in  value  from 
$600,000  to  $2,400,000.  Tin  in  slabs  fell  from  7,000,000 
pounds  to  half  that  but  rose  in  value  from  $1,700,000  to 
$2,000,000.  Galvanized  iron  sheets  fell  from  30,000,000 
pounds  to  9,000,000  pounds,  but  the  value  remained  steady 
at  $1,000,000,  while  galvanized  wire  increased  from  8,000,- 
000  to  10,000,000  pounds  and  the  value  rose  four  times  to 
$1,000,000.  Other  important  items  were  brass  bars,  sheets 
and  wire,  lead  pigs  and  bars,  iron  hoops,  and  pig  iron. 

Sundries. — ^The  largest  item  under  this  head  was  refined 
sugar  whose  import  rose  from  350,000,000  pounds  in  1913 
to  550,000,000  pounds  in  1918,  with  an  increase  in  value  of 
from  $10,000,000  to  $42,000,000.  In  addition  to  this,  white 
sugar  remained  stationary  in  volume  of  imports  at  250,000,- 
000  pounds,  but  doubled  in  value  to  $14,000,000,  and  brown 
sugar  also  remained  the  same  at  300,000,000  pounds,  but  in- 
creased in  value  from  $6,000,000  to  $11,000,000. 

Cigarettes. — Cigarettes  rose  in  number  from  6,000,000 


MARKET  ANALYSIS 


117 


thousands  to  9,000,000  thousands,  and  increased  in  value 
from  $9,000,000  to  $28,000,000. 

Bice. — Rice  and  paddy  imports  increased  in  volume  from 
700,000,000  pounds  to  900,000,000  pounds,  while  the  value 
more  than  doubled,  going  from  $13,000,000  to  $27,000,000. 

Munitions. — Arms  and  munitions  showed  a  gain  during 
the  period  of  from  $5,000,000  to  $16,000,000. 

Coal. — Coal  imports  jumped  in  value  from  $7,000,000  to 
$15,000,000,  although  the  volume  actually  decreased  from 
1,700,000  tons  to  1,000,000  tons. 

Fish. — Fish  and  fishery  products  remained  about  the 
same  in  volume  although  in  value  they  increased  from  $9,- 
000,000  to  $14,000,000. 

Kerosene. — Kerosene  oil  from  the  United  States  showed 
a  falling  off  of  from  112,000,000  to  48,000,000  gallons,  but 
an  increase  in  value  of  $10,000,000  to  $15,000,000,  while 
that  from  Sumatra  increased  in  volume  from  41,000,000 
to  48,000,000  gaUons  and  in  value  from  $4,000,000  to  $14,- 
000,000. 

Leather. — ^Leather  imports  ranked  next  with  an  increase 
of  2,000,000  pounds  over  the  14,000,000  pounds  imported  in 
1913,  but  rose  in  value  from  $5,000,000  to  $11,000,000. 

Paper. — ^Paper  imports  fell  from  129,000,000  pounds  to 
72,000,000  pounds,  but  increased  in  value  from  $4,000,000 
to  $7,000,000. 

Other  important  imports  in  1918  were  raw  cotton,  cloth- 
ing, tobacco,  medicines  (including  cocaine  and  morphia), 
sewing  machines,  match-making  materials,  bags  of  all  kinds, 
and  emery  and  corundum. 

The  Decline  in  the  Volume  of  Imports. — An  analysis  of 
these  figures  shows  that  China's  trade  during  the  five  years 
ending  December  31,  1918,  had  fallen  off  materially  in  the 
volume  of  many  important  lines  of  goods  brought  in.  Had 
shipping  facilities  and  conditions  abroad  enabled  the  same 
amount  of  goods  to  be  shipped  in  1918  as  in  1913,  it  is  quite 


118 


TRADING  WITH  ASIA 


MARKET  ANALYSIS 


119 


probable  that  the  same  conditions  would  have  enabled 
China  to  dispose  of  large  quantities  of  raw  materials  at 
high  gold  prices  and  an  enormous  foreign  commerce  in 
values,  but  representing  little  increase  over  normal  volume 
would  have  resulted.    But  as  a  result  of  the  war  China's 
commerce  has  been  ingrown,  and  enormous  quantities  of 
home  produce,  which  usually  found  its  way  to  foreign 
markets,  have  been  kept  at  home  to  replace  the  food  and 
other  commodities  which  could  not  be  had  from  abroad. 
Under  these  circumstances,  with  a  return  to  normal  con- 
ditions, a  certain  amount  of  revival  of  foreign  commerce 
may  be  expected,  but  in  some  lines,  such  as  cotton  yams, 
with  an  ever  increasing  cotton  production  at  home,  a  steady 
decline  in  imports  must  be  expected.    As  these  industries 
are  built  up  they  must  gradually  and  surely  raise  the  stand- 
ard of  living,  and  instead  of  China's  imports  being  27 
per  cent  cotton  goods,  as  in  1918,  such  goods  will  be  made 
at  home.     Then  China's  every  increasing  exports  of  raw 
materials  will  purchase  semi-luxuries  for  which  there  is 
now  no  market  because  of  the  necessity  of  importing  at 
high  prices  from  abroad  goods  to  fill  the  most  primitive 
wants. 

Japan 

Japan  has  become  so  thoroughly  Westernized  that  her 
methods  of  financing  trade  are  almost  identical  with  those 
of  Europe,  more  closely  resembling  the  German  financial 
structure  than  that  of  the  United  States.  Moreover,  the 
day  of  the  foreign  import  merchant  in  Japan  is  past,  except 
in  a  few  technical  and  specialized  lines  and  many  strong 
Japanese  combinations,  such  as  Mitsui  &  Company,  now 
maintain  buying  agencies  of  their  own  in  the  leading  mar- 
kets of  the  world.  These  companies  are  closely  aflBliated 
with  the  one  or  two  strong  banks,  particularly  the  Yoko- 
hama Specie  Bank,  and  the  Mistui  Ginko,  whose  branches 


extend  to  all  the  principal  trade  centers.  The  inter-rela- 
tion between  these  great  corporations,  the  banks,  and  the 
Japanese  Government,  is  so  close  that  an  exceptionally 
strong  position  has  been  gained  and  held  by  Japan,  espe- 
cially during  the  World  War. 

Raw  Materials. — About  half  of  Japan's  billion  dollar 
import  trade  of  1919  was  raw  materials  and  the  same  ratio 
held  good  in  1918,  when  the  imports  totaled  $800,000,000. 
Of  this  half  a  billion  dollar  import  of  raw  materials  66  per 
cent  or  about  $333,000,000,  was  raw  cotton  which  showed 
an  increase  of  $75,000,000  over  1918.  This  commodity 
furnished  the  greatest  single  item  of  Japan's  imports. 

Oil  Cake. — Oil  cake  for  fertilizer  represented  13  per  cent 
of  the  raw  material  imports,  or  $67,000,000,  an  increase  of 
$21,000,000  over  1918. 

Wool. — ^Wool  filled  six  per  cent  of  the  raw  material  imr 
ports,  or  $30,000,000,  although  the  actual  increase  over 
1918  was  only  $500,000. 

Sulphate  of  Ammonia. — Crude  sulphate  of  ammonia,  used 
for  fertilizer  manufacture,  showed  a  most  phenomenal  in- 
crease in  1919,  going  to  $13,500,000  from  $150,000  in  1918, 
and  covering  two  and  one-half  per  cent  of  Japan's  raw 
material  imports. 

Iron  Ore. — Ores,  principally  iron  ore  from  the  Japanese 
controlled  Hanyang  iron  mines  near  Hankow  in  China, 
showed  two  per  cent  of  the  total  raw  material  imports  of 
$10,000,000,  a  very  slight  increase  over  1918. 

Coal. — Coal  imports  increased  from  one  and  one-half  per 
cent  to  1.8  per  cent  of  the  raw  material  imports,  the  1919 
imports  totaling  $9,000,000  or  almost  $2,000,000  more  than 
in  1918.  Japan's  exports  of  coal  jumped  from  a  value 
of  $16,000,000  in  1918  to  $18,900,000  in  1919,  or  nearly  18 
per  cent,  mostly  due  to  the  increase  in  prices. 

Rubber. — Imports  of  crude  India  rubber  and  gutta 
percha  used  in  the  manufacture  of  rubber  goods  and  insu- 


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TRADING  WITH  ASIA 


lating  materials  amounted  to  1.7  per  cent  of  the  raw  ma- 
terial imports,  or  $8,500,000,  showing  an  increase  of  $2,000,- 
000  over  1918. 

Fibers. — Flax,  hemp,  jute,  etc.,  suffered  a  falling  off  of 
almost  $3,000,000  in  1919,  but  still  represented  1.6  per 
cent  of  the  imports  of  raw  materials  in  1919,  or  $8,000,000. 

Eides.--Ride8  and  skins  showed  a  $1,800,000  gain  in 
1919  over  1918,  the  import  figures  being  $7,500,000  the  last 
year  or  one  and  one-half  per  cent  of  the  group  figures. 

Saltpeter. — Chile  saltpeter  accounted  for  1.3  per  cent,  or 
$7,000,000,  of  the  group  imports,  showing  a  gain  of  over  a 
million  dollars. 

All  other  raw  materials  represented  a  trifle  less  than  10 
per  cent  of  the  total  raw  material  imports,  or  $98,000,000. 

Partly  Manufactured  Materials. — Twenty-three  per 
cent  of  Japan's  total  trade  in  1919  was  in  materials  for 
further  use  in  manufacturing,  and  33  per  cent  of  this  rep- 
resented iron  bars,  rods,  plates,  and  sheets  which  decreased 
in  value  from  $102,000,000  in  1918  to  $78,000,000  in  1919. 
These  were  used  principally  in  shipbuilding. 

Pig  Iron. — Pig  iron,  ingots,  and  slabs  were  12  per  cent  of 
the  total  imports  in  this  group,  also  showing  a  decrease, 
falling  from  $32,000,000  in  1918  to  $29,000,000  in  1919. 

Building  Materials. — Construction  materials  were  five  per 
cent  of  the  group  imports  and  showed  a  gain  from  $8,000,- 
000  in  1918  to  $12,000,000  in  1919.  This  reflects  not  only 
the  normal  increase  in  construction  incidental  to  an  in- 
creasing population  and  a  wider  adoption  of  Western  archi- 
tecture, but  an  impetus  lent  to  building  by  the  increase  in 
wealth  and  the  establishment  of  industries. 

Caustic  Soda. — Caustic  soda  and  soda  used  for  soap  and 
paper  manufacture  remained  normal  at  $7,000,000  for  both 
1918  and  1919,  being  about  three  per  cent  of  the  total  group 
imports. 

Iron  Pipe. — The  same  was  true  of  iron  pipe*  and  tubes 


MARKET  ANALYSIS 


121 


which  showed  no  great  variation  in  1919  from  the  $6,500,- 
000  import  value  of  1918.  These  were  about  three  per  cent 
of  the  total  group  imports. 

Dyes. — Coal  tar  dye  imports  showed  a  slight  decrease  in 
1919  having  a  value  of  $5,000,000,  or  two  per  cent  of  the 
total.  The  demand  had  increased  but  the  manufacture  of 
domestic  dyes  had  been  more  than  able  to  take  care  of  it. 

Paper  Pulp. — Paper  pulp  imports  increased  from  $3,- 
000,000  in  1918  to  $5,000,000  in  1919  absorbing  two  per 
cent  oU  the  import  trade  of  this  group. 

Lead  Ingots. — Lead  ingots  and  slabs  fell  off  considerably 
from  $7,000,000  to  $5,000,000,  and  composed  only  two  per 
cent  of  the  group  imports. 

Other  important  imports  in  this  group  were  tin  ingots 
and  slabs,  leather,  nickel  ingots,  and  grain. 

Foodstuffs— Bice,  Sugar,  and  Beans,— Articles  classed 
as  food,  drink,  and  tobacco  accounted  for  16  per  cent  of 
Japan's  imports  and  covered  a  wide  variety  of  foodstuffs, 
comestibles  and  semi-luxuries  for  which  Japan's  rising 
standard  of  living  and  increasing  population  provided  a 
larger  market  than  heretofore.  The  1919  imports  in  this 
group  increased  exactly  100  per  cent  over  1918,  the  total 
figures  for  1919  being  $175,000,000. 

Rice  imports  were  46  per  cent  of  the  total  foodstuff 
imports,  amounting  in  value  to  $81,000,000,  an  increase  of 
$36,000,000  over  the  preceding  year. 

Sugar  represented  16  per  cent  of  the  foodstuff  imports 
with  an  increased  valuation  of  $12,000,000  over  the  $17,- 
000,000  of  1918. 

Beans  and  peas,  representing  10  per  cent  of  the  import 
total,  showed  an  increase  of  $7,000,000  over  the  $10,000,- 
000  of  1918. 

Japan's  growing  dependence  upon  imported  foodstuffs 
is  the  natural  result  of  her  development  as  a  manufacturing 
nation,  but  the  Government  is  giving  serious  attention  to 


122 


TRADING  WITH  ASIA 


the  question  of  increasing  home  food  production  by  the 
more  intensive  use  of  fertilizer  and  other  agricultural 
methods. 

Bfanufactured  Goods. — Representing  but  11  per  cent  of 
the  total  imports,  Japan's  1919  imports  of  wholly  manu- 
factured goods,  nevertheless,  show  a  $46,000,000  increase 
over  the  $85,000,000  imports  in  this  group  for  1918.  This 
is  largely  accounted  for  by  the  large  purchases  abroad 
of  spinning  and  other  machinery,  which  is  necessary  in 
order  to  make  it  possible  for  Japan  to  adopt  a  shorter 
work  day  in  accordance  with  the  decision  of  the  Interna- 
tional Labor  Conference.  This  will  entail  changing  from 
two  shifts  of  12  hours  each,  as  in  most  factories  at  present, 
to  three  shifts  of  eight  hours  each. 

Machinery. — The  machinery  imports  account  for  35  per 
cent  of  the  total  imports  of  manufactured  goods,  or  $44,- 
000,000  worth,  an  increase  of  $15,000,000  over  those  of 
1918. 

Kerosene. — Kerosene  imports  are  included  in  this  group 
and  represent  eight  per  cent  of  the  group  imports  and  they 
increase  $7,000,000  over  the  $4,000,000  worth  imported  in 
1918.  The  falling  off  of  Japan 's  oil  production,  due  to  fail- 
ure of  many  wells  to  yield,  accounts  for  much  of  this  in- 
creased import. 

Paper. — Paper  imports  represent  seven  per  cent  of  the 
imports  in  this  group,  or  $9,000,000,  an  increase  of  $4,000,- 
000  over  1918. 

Woolen  Goods. — ^Woolen  tissue  amounts  to  five  per  cent 
of  the  group  imports,  or  $6,000,000,  a  very  slight  increase 
over  1918. 

Other  important  items  in  this  group  are  cotton  tissues, 
$4,000,000,  and  iron  nails,  $2,500,000,  the  latter  showing  a 
slight  decrease  under  the  1918  imports. 

A  variety  of  minor  manufactured  goods  in  the  semi- 
luxury  and  luxury  class  represented  40  per  cent  of  the 


^1 

i 


MARKET  ANALYSIS 


123 


manufactured  goods  imports  of  1919,  or  about  $52,000,000, 
an  increase  of  $20,000,000  over  the  imports  of  the  year 
preceding. 

The  Future  of  Japanese  Import  Trade.— The  develop- 
ment of  Japan  indicates  to  some  extent  the  development 
which  may  be  expected  to  take  place  in  China.  With  a 
limitless  supply  of  cheap  labor  the  West  cannot  hope  to 
continue  to  supply  these  two  countries  with  many  of  the 
staples  and  necessities  of  life,  but  by  supplying  the  ma- 
chinery with  which  these  may  be  manufactured  at  home, 
thus  conserving  to  the  domestic  population  a  large  amount 
of  ** goods  wealth'*  which  would  have  to  be  sent  abroad  as 
profit  to  the  Western  manufacturer  of  these  staples,  we 
automatically  raise  the  standard  of  living  to  a  point  where 
all  the  raw  materials  produced  do  not  have  to  be  exported 
to  pay  for  the  manufactured  goods  brought  in,  but  a  con- 
siderable proportion  may  be  retained  at  home  and  form  a 
surplus  through  which  the  per  capita  wealth  will  be  raised. 
When  this  takes  place  we  will  have  an  opportunity  of 
creating  desires  for  luxuries  and  semi-luxuries  which  can- 
not be  manufactured  by  the  crude,  untrained  labor  of  the 
East  and  in  this  way  the  standard  of  living  again  rises. 
This,  in  short,  is  the  development  which  has  taken  place 
in  Japan  and  the  one  which  may  be  looked  forward  to  in 
China. 

Questions 

1.  Discuss  the  compradore  system  in  China. 

2.  Why  have  China^s  imports  of  cotton  goods  decreased? 

3.  Name  some  of  the  principal  metal  imports  of  China  and  de- 

scribe their  uses. 

4.  Name  five  imports  designated  as  sundries  and  comment  on 

each. 

5.  Why  has  the  volume  of  China's  unport  trade  fallen  offf 

6.  How  is  trade  financed  in  Japan  f 

7.  What  are  five  of  Japan's  principal  imports  of  raw  materials 

and  describe  the  use  made  of  eacht 


tl 

ll 


124 


TBADING  WITH  ASIA 


8.  What  part  do  semi-manufactured  goods  play  in  Japan's  im- 

port trade?    Name  five  commodities. 

9.  Comment  on  Japan^s  imports  of  manufactured  jfoods,  givingf 

five  articles. 
10.  How  has  the  import  of  machinery  increased  the  import  trad* 
in  other  lines  in  Japan! 


hi 


CHAPTER  VIII 

CHINESE  FINANCE  AND  TRANSPORTATION   DEVELOPMENT 

The  Effect  of  the  Boxer  Indemnity  on  Chinese  Finance. 

— It  is,  perhaps,  not  too  much  to  say  that  the  Boxer  Re- 
bellion and  the  resulting  indemnities,  amounting  to  450,- 
000,000  Haikwan  taels  ($333,000,000),  were  deciding  fac- 
tors in  China's  economic  development,  for  without  this 
drain  upon  the  Treasury  and  the  consequent  financial  em- 
barrassment in  official  circles,  foreign  loans  would  not  have 
been  resorted  to,  and  the  transportation  and  industrial  de- 
velopment which  followed  the  *' Battle  of  Concessions** 
would  have  been  postponed.  It  is  undoubtedly  true  that 
other  factors  hastened  the  construction  of  railroads,  not 
the  least  important  of  which  was  the  desire  of  the  Manchus, 
who  had  read  the  warning  in  the  Sino-Japanese  war,  to 
centralize  their  control  over  the  outlying  provinces  by  bet- 
ter transportation  facilities,  and  the  eagerness  of  rival 
European  interests  to  grasp  at  any  opportunity  to  obtain 
an  economic  foothold  in  what  was  thought  to  be  a  disinte- 
grating empire.  Whatever  the  causes,  the  fact  remains 
that  in  1917  China  was  paying  about  £174,000  (about 
$700,000)  monthly  to  the  Great  Powers  as  installments  of 
the  indemnity,  which  payments  were  divided  approxi- 
mately between  Russia,  29  per  cent,  France,  16  per  cent, 
Great  Britain,  11  per  cent,  Japan,  8  per  cent.  United  States, 
7  per  cent  (dedicated  in  part  to  education  of  Chinese 
students  in  the  United  States),  and  Italy,  6  per  cent. 
The  remaining  23  per  cent  represented  the  cancelled  shares 
of  Germany,  Austria,  and  smaller  powers.    In  considera- 

125 


<j 


I 


:i 


126 


TRADING  WITH  ASIA 


i| 


tion  of  China's  entrance  into  the  war  all  the  powers  agreed 
in  December,  1917,  to  permit  China  to  defer  payment  of 
an  amount  equalling  nine  and  one-half  per  cent  of  the 
total  which  was  the  average  of  eight  powers  in  the  total 
of  77  per  cent  being  paid  them.     The  remaining  I91/2  per 
cent  of  Russia's  share  was  thereafter  to  be  dei)osited  in  the 
Russo-Asiatic  Bank,  as  custodian,  with  the  understanding 
that  a  certain  proportion  should  be  allotted  for  the  mainte- 
nance  of   the   Kerensky   regime's   Russian   Legation    at 
Peking.^    At  the  same  time  the  revision  of  the  Chinese  tariff 
to  an  effective  five  per  cent  and  the  rise  in  the  exchange 
value  of  silver,  resulting  in  an  equivalent  reduction  in  the 
amount  of  silver  required  to  pay  the  gold  indemnity  pay- 
ments remaining,  strengthened  considerably  the  finances  of 
the  Chinese  Government. 

The  Condition  of  the  Chinese  Treasury.— The  condition 
of  the  Chinese  Treasury  in  the  early  part  of  1920  was, 
nevertheless,  in  a  traditional  state  of  deficit,  placed  by 
conservative  estimates,  at  $2,700,000  per  month,  which  was 
being  borrowed  from  native  banks  against  security  of  fu- 
ture revenue,  piling  up  a  steadily  increasing  debt.     This 
was  due  to  the  fact  that  in  the  budget  of  the  Peking  Gov- 
ernment alone  for  February,  1920,  $2,200,000,  out  of  a 
total  of  $4,000,000  expended,  was  for  the  maintenance  of 
the  military   establishment   directly  under  Peking.     The 
cost  of  the  military  establishment  under  the  provincial 
governments  cannot  be  accurately  estimated.     To  meet  this 
deficit,  borrowing  from  foreign  countries,  especially  Japan, 
was  freely  engaged  in  during  1917  and  1918  and  about 
$150,000,000  was  obtained  in  this  way  for  administrative 
expenses  during  these  two  years  for  which  national  mines, 
forests,  telegraph  property,  and  railways  (existing  or  pro- 
posed) were  pledged  as  security.    Domestic  loans  on  the 
security  of  the  deferred  Boxer  Indemnity  and  future  reve- 

1  This  agreement  was  discontinued  in  1920. 


CHINESE  FINANCE  AND  TRANSPORTATION     127 

nues  of  the  Native  Customs,  treasury  bills  issued  in  pay- 
ment for  military  and  other  unproductive  supplies,  and 
overdrafts  by  the  Government  on  the  Bank  of  China,  the 
Bank  of  Communications,  the  Salt  Industrial  Bank,  and 
other  Chinese  institutions  only  add  to  the  long  list  of  lia- 
bilities of  the  Chinese  Government,  definite  knowledge  as  ^ 
to  the  amount  of  which,  it  is  almost  impossible  to  ascertain. 
Rough  estimates,  however,  at  the  close  of  1919  placed  the 
monthly  expenditure  at  $9,000,000  and  the  monthly  revenue 
at  $6,300,000.  Of  the  income  $2,700,000  was  contributed 
as  surplus  from  salt  revenue  not  otherwise  hypothecated; 
$1,800,000  came  from  the  Maritime  Customs  surplus ;  $900,- 
000  from  wine  and  tobacco  tax ;  and  $900,000  from  sundry 
receipts.  No  revenue  was  being  received  from  the  provinces 
by  the  Peking  Government. 

The  Unmobilized  Credit  of  China.— As  a  result  of  this 
hand  to  mouth  financial  policy  periodical  crises  arise,  espe- 
cially on  settlement  day  early  in  February,  or  Chinese 
New  Year,  and  in  the  spring  when  crop  credits  are  neces- 
sary, and  to  meet  these  crises  further  borrowing  is  neces- 
sary. But  although  the  central  Government  of  China  is 
undoubtedly  bankrupt,  the  credit  of  China  as  a  whole  is 
largely  unmobilized  and  fundamentally  sound,  resting  as  it 
does,  upon  the  immense  productive  value  of  the  soil  and 
people  of  China.  The  total  indebtedness  of  China,  accumu- 
lated since  the  first  foreign  loan  in  1895,  raised  to  pay  the 
indemnity  resulting  from  the  Sino- Japanese  war,  to-day 
amounts  to  about  $1,500,000,000,  or  a  little  under  $4.00  per 
capita.  As  security  for  the  foreign  loans  the  Maritime 
Customs  yielded  $48,600,000  in  1918,  the  Salt  Revenue, 
$62,000,000,  and  the  Wine  and  Tobacco  Revenue,  $10,800,- 
000,  or  a  total  of  $121,400,000.  This  is  a  total  1918  per 
capita  revenue  yield  of  30  cents  per  annum,  which  is  over 
seven  per  cent  on  the  indebtedness.  The  1919  estimated 
2  See  appendix  VII. 


il 


128 


TRADING  WITH  ASIA 


yields  of  these  three  revenues  are  Maritime  Customs,  $58,- 
500,000 ;  Salt  Revenue,  $77,400,000 ;  and  Wine  and  Tobacco 
Revenue,  $27,000,000,  or  a  total  of  $162,900,000  for  1919 
and  a  per  capita  revenue  yield  of  over  40  cents  per  annum 
or  over  10  per  cent  on  the  indebtedness.  This  increased 
revenue  yield  has  permitted  the  paying  off  of  old  debts  to 
keep  pace  with  the  heavy  borrowin^js  in  1917  and  1918  so 
that  the  per  capita  debt  has  not  increased  since  1914. 

The  New  Consortium.— The  importance  of  the  new  Con- 
sortium agreement,  therefore,  between  Great  Britain,  Amer- 
ica, France,  and  Japan,  lies  in  the  fact  that  with  the  abo- 
lition of  military  expenses  the  Chinese  Government  can 
be  easily  brought  to  a  solvent  position.  The  whole  idea 
of  the  Consortium  is  the  safeguarding  of  funds  for  pro- 
ductive expenditure  only  and  especially  for  the  construc- 
tion of  railways,  which  would  help  China  politically  by 
ensuring  a  rapid  extension  of  the  central  Government 's  au- 
thority and  make  a  representative  government  possible. 
Financially  it  would  provide  a  national  asset  in  the  shape 
of  railways  which  would  produce  a  rapid  and  certain  re- 
turn on  foreign  investments,  while  commercially,  trans- 
portation is  the  one  thing  needed  to  bring  China's  inland 
products  to  the  sea  and  convey  the  manufactured  goods  of 
the  Western  nations  to  a  people  whose  purch'^sing  power 
would  be  enormously  enhanced  by  finding  a  world  market 
for  their  products. 

Under  present  conditions  the  extension  of  further  credit 
by  any  single  power  would  be  destructive  of  China's  credit 
and  unjust  to  existing  foreign  investors.  Funds  provided 
on  a  sound  basis  of  audit  and  control,  on  the  other  hand, 
such  as  is  proposed  by  the  Consortium,  can  be  used  to 
strengthen  the  Government  in  constructive  enterprise  and 
improve  its  financial  position.  China's  national  credit  is 
sound  and  requires  only  mobilization  under  a  sound  policy 
on  the  part  of  foreign  lenders. 


CHINESE  FINANCE  AND  TRANSPORTATION     129 

Present  Railroad  Development.— The  present  Chinese 
railroads  built  by  foreign  loans  form  a  mere  skeleton  of 
north  and  south  trunk  lines  extending  from  Mukden  to 
Peking— the  Peking-Mukden  Railroad  (5)  ^  (British  Loan, 
535  miles) — and  then  branching  in  two  directions,  one  due 
south  to  Hankow  on  the  Yangtze,  the  Peking-Hankow  Rail- 
road (8)  (Belgian-French  Loan,  Chinese  management,  755 
miles),  thence  to  Changsha,  the  Canton-Hankow-Changsha 
section  (15)   (British  Loan,  295  miles),  and  one  southeast 
to  Tientsin  and  Pukow  on  the  Yangtze,  the  Tientsin-Pukow 
Railroad    (9)     (British    Loan,    628    miles).    Across    the 
Yangtze  from  Pukow  at  Nanking  the  Shanghai-Nanking 
Railroad  (13)  (British  Loan,  193  miles),  makes  connection 
with  the  sea.     From  Shanghai  another  road,  the  Shanghai- 
Hangchow-Ningpo  Railroad  (14)  (British  Loan,  176  miles) 
makes    a   detour   around   Hangchow    Bay   to    the   south. 
Attached  to  this  skeleton  are  six  short  feeder  lines  at  vari- 
ous points.    One  extending  from  Changchun,  the  junction 
of  the  Chinese  E^^stem  and  South  Manchurian  Railroads, 
to  Kirin  in  Manchuria,  the  Changchun-Kirin  Railroad  (6) 
(Japanese  Loan,  81  miles)   and  another,  the  Shipingkai- 
Liaoyun  Railroad  (7)  (Japanese  Loan,  55  miles)  extending 
from  the  South  Manchurian  Railroad  below  Changchun 
westward  toward  the  Mongolian  border,  form  the  feeders 
to  the  Japanese  concession  road,  the  South  Manchurian 
Railroad.     Farther  down  on  the  Peking-Hankow  line  the 
Cheng-Tai    Railroad    (10)     (Belgian-French    Loan,    151 
miles)  connects  Chenting  in  Chihli  Province  with  Taiyuan 
in  Shansi  Province  to  the  west,  while  the  Taokow-Chinghua 
Railroad  (11)   (British  Loan,  81  miles)  connects  cities  of 
those   names   in    Honan   Province,    crossing   the    Peking- 
Hankow  line  at  Singsiang.    South  of  this  the  Penlo  Rail- 
road and  the  completed  portion  of  the  Lunghai  Railroad 
(12)    (Belgian-French  Loan,  287  miles)  connects  Kaifeng 

3  Numbers  in  parentheses  refer  to  key  map  lining  front  cover. 


130 


TRADING  WITH  ASIA 


I 


III 


I 


on  the  Pekinf^-Hankow  line  with  Suchow  on  the  Tientsin- 
Pukow  line.     The  only  other  railroad  built  with  foreign 
loans  in  China  is  the  Canton-Kowloon  Railroad  (16)  (Brit- 
ish Loan,  89  miles)  extending  from  Canton  down  the  West 
River  delta  to  Kowloon  opposite  the  island  of  Hongkong. 
There  have  been  built  in  China  with  foreign  loans  3,326 
miles  of  railroad  at  a  total  estimated  cost  of  $428,939,000. 
The  Concession  Lines.—In  addition  to  these  railways 
there  are  four  lines  known  as  concession  lines,  which  are 
the  property  of  foreign  countries  or  their  nationals  and 
while  built  on  Chinese  territory  are  located  on  rights  of 
way,  which  to  all  intents  and  purposes  are  foreign  terri- 
tory.    The  Chinese  Eastern  Railway  (3)  (Russian  Conces- 
sion, 1,069  miles)  extends  across  northern  Manchuria  from 
the  Siberian  border  to  Vladivostok  and  from  Harbin  to 
Changchun,  where  it  connects  with  the  South  INIanchurian 
Railroad   (1)    (Japanese  concession,  714  miles)  extending 
from  Changchun  to  Dairen,  with  a  branch  at  Mukden  to 
Antung  on  the  Yalu  River  border  of  Korea.     The  Shan- 
tung Railroad  (2)   (German  concession,  occupied  by  Jap- 
anese, 306  miles)  connects  Tsinanfu  on  the  Tientsin-Pukow 
Railroad  with  the  port  of  Tsingtao  on  the  Shantung  Penin- 
sula.   The  Indo-China  Yunnan  Railway  (4)  (French  eon- 
cession,  289  miles)  crosses  the  Chinese  border  from  French 
Indo-China  below  Mengtze  and  runs  on  into  Yunnan  Prov- 
ince to  the  city  of  Yunnan.    The  total  cost  of  these  2,378 
miles  of  concession  road  is  estimated  at  $288,000,000. 

Chinese  Government  Railways.—Chinese  Government 
railways  built  with  Chinese  Government  funds  and  oper- 
ated by  the  Chinese  Department  of  Communications  form 
the  next  largest  group  of  railroad  properties  in  China. 
The  Peking-Suiyiian  Railroad  (17)  (Chinese  Government, 
266  miles)  runs  due  west  from  Peking  connecting  with 
Kalgan  and  Tatung  and  piercing  the  Great  Wall  northwest 
of   that   place.     The    Chuchow-Pingsiang    (20)     (Chinese 


CHINESE  FINANCE  AND  TRANSPORTATION      131 


Government,  60  miles)  runs  eastward  from  the  southern 
terminus  of  the  Changsha  section  of  the  Canton-Hankow 
line.  The  Canton-Samshui  (19)  (Chinese  Government, 
31  miles)  extends  from  Canton  up  the  West  River,  while 
the  Amoy-Changchow  Railroad  (18)  (Chinese  Govern- 
ment, 17  miles)  runs  west  from  Amoy.  In  all  the  Chinese 
Government  has  built,  largely  from  profits  made  above  stip- 
ulated returns  on  the  loan  railways,  374  miles  of  railroad 
at  a  cost  of  $37,177,000. 

Chinese  Private  Railroads.— The  Chinese  private  rail- 
roads, built  with  private  capital,  form  the  last  group.  The 
Canton-Shuchowfu  Railroad  (21)  (Private,  140  miles)  is 
the  beginning  of  the  southern  end  of  the  Canton-Hankow 
line.  The  Kiukiang-Nanchang  Railroad  (22)  (Private,  80 
miles)  extends  from  the  Yangtze  south  to  Nanchang.  The 
Sunning  Railway  (23)  (Private,  68  miles)  runs  from  a 
point  south  of  Canton  to  the  coast,  while  the  Swatow-Chao- 
chowfu  Railroad  (24)  (Private,  26  miles)  extends  inland 
from  the  port  of  Swatow. 

Raihroads  Contracted  For.— This  total  development  of 
6,740  miles  of  railroad  does  not  begin  to  serve  adequately 
the  Chinese  people  either  commercially  or  politically.  The 
additional  mileage  already  contracted  for  on  a  loan  basis 
amounts  to  8,429  miles  and  runs  in  the  main  from  east  to 
west.  In  general  these  contracts  call  for  the  construction 
of  a  huge  circle  of  railroads  beginning  at  Pukow  on  the 
Yangtze  and  running  due  west  to  Chengtu  in  Szechuen 
Province,  and  from  there  south  and  southeast,  skirting 
Yunnan  to  Pakhoi  on  the  Gulf  of  Tonkin,  thence  northeast 
through  Kwangsi  and  Hunan  Provinces  to  connect  with 
the  Canton-Hankow  line  and  on  through  Kiangsi  and 
Anhwei  Provinces  to  Pukow.  Inside  this  great  circle  is  a 
smaller  circle  beginning  at  Hankow  and  running  southwest, 
meeting  the  larger  circle  above  Nanning  in  Kwangsi.  An- 
other great  circle  of  contracted  railroads  begins  at  the 


m 


132 


TRADING  WITH  ASIA 


I 


terminiis  of  the  Taokow-Chinghua  Railroad  in  Honan  nin- 
ning  northwest  to  .Pingyang,  thence  due  north  to  Tttung" 
connecting  with  the  Peking-Suiyuan,  from  the  western 
terminus  of  which  at  Terigcheng  it  runs  due  west,  skirting 
the  Yellow  River  through  inner  Mongolia  and  running 
southwest  to  Lanchow  in  Kangsu  Province.  From  here  on 
east  and  west  lines  connect  with  the  Penlo  Railroad  now 
running  to  Suchow  from  which  place  a  projected  line  to 
Haichow  on  the  coast  would  form  the  Lanchow-Haichow 
(or  Lunghai)  Railroad  or  Great  East  and  West  Trunk  line. 
Other  lines  in  this  region  are  the  Tsinan-Shunteh  connect- 
ing the  Peking-Hankow  and  the  Tientsin-Pukow  lines,  the 
line  connecting  Tsinan  with  the  Taokow-Chinghua  Railroad 
and  the  line  connecting  Kaomi  on  the  Shantung  Railroad 
with  Suchow  on  the  Tientsin-Pukow  line. 

Manchurian  Railroads  Contracted  For.— The  group  of 
roads  contracted  for  in  Manchuria  and  Mongolia  consist 
of  a  road  from  Aigun  on  the  Amur  south  to  Chinchow  on 
the  Gulf  of  Chihli;  a  road  west  from  Changchun  to  Tao- 
nanfu  on  this  proposed  Chinchow-Aigun  Railroad;  a  road 
northwest  from  Harbin  to  meet  the  same  road;  and  a  road, 
the  Taonanfu-Jehol,  running  from  the  Chinchow-Aigun 
southwest  towards  Peking.  To  the  east  one  road  from 
Kirin  would  run  southwest  meeting  the  South  Manchurian 
road  above  Mukden  and  another  from  Kirin  would  run  due 
east  to  the  Korean  border  and  on  to  the  coast  at  Seishin. 
Work  on  these  contracts  has  been  suspended  during  the  war 
and  little  construction  has  been  done.  Under  the  terms  of 
the  Consortium  agreement,  loans  for  all  future  construc- 
tion, upon  which  no  substantial  progress  has  been  made, 
must  first  be  offered  to  the  Consortium  and  if  not  taken  up 
by  them  may  be  floated  by  any  singjle  power.  Under  this 
interpretation  the  financing  of  practically  all  of  these  roads 
will  be  offered  to  the  Consortium,  and  their  construction 
would  mean  the  real  commercial  awakening  of  China. 


Y  f 


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Washington,  D.  C,  1916;  No.  170,  "Motor  Vehicles  in 
Chma.  Washington,  D.  C,  1918;  No.  172,  "Electrical 
Goods  m  China."  Washington,  D.  C,  1918;  No.  173, 
Shoe  and  Leather  Trade  of  China."  Washington,  D. 
C.,  1918;  No.  180,  "Railway  Materials  and  Supplies." 
Washington,  D.  C,  1919;  No.  104,  "Lumber."  Wash- 
mgton,  D.  C,  1915. 

-  Miscellaneous  Series,  No.  50,  "Hardware."  Washington,  D. 
C.,  1917;  No.  92,  "Canned  Goods."  Washington,  D.  C, 
J.0XO. 

Goodrich,  J.  E.: 

Our  Neighbors  the  Chinese.    London.  1913 
HoLDiCH,  T.  H. : 

Tibet  the  Mysterious.    New  York,  1906 
Jernigan,  T.  R.  : 

Chinese  Business  Methods  and  Policy.    London  1904 
Lung,  Y.:  c^  ,    ^^v^r. 

Village  and  Town  Life  in  China.     London,  1915 
Morse,  H.B.:  ' 

Guilds  of  China.    New  York,  1909 
Thompson,  J.  S.  : 

China  Revolutioned.    London,  1913 
Wagel,  S.  R.  :  '         * 

Finance  in  China.     Shanghai,  1914. 

Chinese  Currency  and  Banking.     Shanghai,  1915. 


Japan 

Angier,  a.  : 

Far  East  Revisited.    London,  1908. 
Bureau  of  Foreign  and  Domestic  Commerce- 

Miscellaneous  Series  No.  10,  "Advertising  Mediums." 
Washmg^on,  D.  C,  1913;  No.  50,  "Hardware."  Wash- 
mgton,  D.  C,  1912. 

Special  Agents  Series,  No.  170,  "Automobiles."  Washington, 
D.  C,  1918;  No.  92,  "Canned  Goods."    Washington,  D. 


140 


TRADING  WITH  ASIA 


\  "\ 


C,  1915;  No.  86,  "Cotton  Goods."  Washington,  D.  C, 
1914;  No.  62,  'foreign  Credits."  Washington,  D. 
C,  1913;  No.  28,  "Customs  Tariff."  Washington,  D.  C, 
1912;  No.  172,  "Electrical  Goods."  Washington,  D. 
C,  1918;  No.  173,  "Shoe  and  Leather  Goodi."  Wash- 
ington, D.  C,  1918;  No.  180,  "Railway  Equipment." 
Washington,  D.  C,  1919. 

Dautromer,  J. : 

Economic  Conditions.    New  York,  1910. 

De  Brunofp,  M.: 

General  View  of  Commerce  and  Industry,    Tokyo,  1900. 
Fox,  Frank: 

Problems  of  the  Pacific.    New  York,  1913. 
HircHCXKTK,  F.  H. : 

Our  Trade  with  Japan.    Government  Printing  Office,  Wash- 
ington, D.  C,  1900. 
HosiE,  A. : 

Manchuria.    New  York,  1904. 
Kakuzo,  Okakura: 

The  Awakening  of  Japan.    New  York,  1904. 
KiNOSHITA,  Y.: 

Past  and  Present  of  Japanese  Commerce.    Boulder,  Color- 
ado, 1900. 
Millard,  T.  F.  : 

Our  Eastern  Question.    New  York,  1916. 
NiTROBE,  I.  0.: 

Bushido,  The  Soul  of  Japan.    Philadelphia,  1900. 
Weale,  Putnam : 

Reshaping  of  the  Far  East.    New  York,  li*u5. 
Whigham,  W.  : 

Manchuria  and  Korea.    New  York,  1904. 


li 


PART  II 


THE  PHILIPPINES  AND  THE  DUTCH 
EAST  INDIES 


I 


CHAPTER  IX 


HISTORY  OF  THE  PHILIPPINES  AND  THE  DUTCH  EAST  INDIES 

DURING  FOREIGN   OCCUPATION 

The  early  adventurers  from  Europe  who  sought  trading 
privileges  with  the  people  of  China  and  Japan  had  already 
learned  that  they  could  demand  them  successfully  from  the 
peoples  of  the  tropical  and  semi-tropical  islands  to  the 
south.  These  island  people,  possessing  none  of  the  war- 
like proclivities  of  the  Japanese,  nor  being  favored  by  a 
vast  unconquerable  territory  like  the  Chinese,  were  sub- 
dued with  comparative  ease  and  soon  sank  into  the  sub- 
servient condition  of  a  subject  people.  This  was  not  ac- 
complished, of  course,  without  some  difficulty,  but  once  the 
different  island  tribes  were  pacified,  it  only  remained  for 
their  conquerors  to  play  off  the  jealousies,  natural  to  iso- 
lated island  people,  one  against  the  other  in  order  to  pro- 
tect themselves  from  unified  revolt. 

The  Philippine  Islands 

Discovery  of  the  Philippines  by  Blagellan.— Magellan, 
in  search  of  a  western  route  to  the  Moluccas,  or  Spice 
Islands,  had  already  persuaded  King  Charles  of  Spain  that 
Spanish  rights  of  exploration  lay  in  the  western  hemi- 
sphere, leaving  the  Portuguese  their  claims  to  the  eastern 
hemisphere  by  right  of  prior  discovery.  Pope  Alexander 
VI,  appealed  to  as  arbitrator  by  Spain  and  Portugal,  had 
created  an  artificial  dividing  meridian  in  the  Atlantic  and 
had  granted  Spain  the  right  to  explore  west  of  this  line 
and  Portugal  east  of  it.  This  was  due  to  an  erroneous 
idea  that  the  world  was  much  smaller  than  it  really  was 

143 


144 


TRADING  WITH  ASIA 


and  that  Columbus'  discoveries  were  merely  the  most  east- 
em  reaches  of  a  vast  archipelago  extending  westward  to 
the   Malay  peninsula.    Magellan  had  visited  the  Malay 
peninsula  in  1511  and  had  there  heard  of  the  rich  islands 
to  the  east,  which  he  determined  to  approach  from  the 
west  in  order  to  avoid  all  claims  on  the  part  of  Portugal. 
His  voyage,  begun  in  1519,  landed  him  in  1521,  after  many 
vicissitudes,  at  Cebu  in  the  Philippines.    Here  Magellan 
was  so  deceived  by  the  good  feeling  displayed  by  the  na- 
tives that  he  ventured  to  another  island  with  too  small  a 
force  and  he  and  his  party  were  killed.    The  rest  of  the 
expedition  escaped  and  returned  to  Spain  in  1522,  having 
accomplished  the  first  circumnavigation  of  the  globe. 

The  Work  of  Legaspi.— Several  explorers  followed  Ma- 
gellan to  the  islands,  one  of  whom  named  one  of  the  islands 
**Filipina''   in  honor  of  Prince  Philip  of  Spain.    This 
name  was  afterward  extended  to  include  the  whole  group 
which  were  thereafter  known  as  the  *' Philippines.''    In 
1564  Legaspi  was  commissioned  by  the  now  King  Philip 
II  of  Spain  to  settle  and  subdue  the  islands  named  in  his 
honor.    After  encountering  little  opposition  on  the  islands 
of  Leyte,  Bohol,  and  Mendanao,  Cebu  had  to  be  taken  by 
force  but  peace  was  soon  established.    Unfortunately  the 
decision  of  Pope  Alexander  had  made  no  provision  for  an 
eastern  limit  to  the  territories  which  he  had  divided  be- 
tween Spain  and  Portugal  in  the  Atlantic  and  although 
Portugal  continued  to  lay  claim  to  the  Philippines,  Spain 
refused  to  recognize  the  claim.    In  1569  Legaspi  trans- 
ferred the  seat  of  his  government  from  Cebu  to  Iloilo  and 
continued  to  explore  and  pacify  the  islands,  founding  Ma- 
nila in  1571.     In  his  process  of  pacification  Legaspi  de- 
pended largely  upon  the  industry  of  the  monks,  but  re- 
sorted, when   necessary,   to   force.    Provincial   governors 
were  appointed  from  among  his  followers  who  levied  tri- 
bute at  a  rate  fixed  by  him  and  annual  voyages  were  made 


HISTORY  OF  THE  PHILIPPINES 


145 


to  Mexico  for  supplies.  In  this  way  the  Philippines  were 
really  governed  from  Mexico  rather  than  from  Spain  di- 
rectly. When  Legaspi  died  in  1574  the  conversion  of  the  na- 
tives to  Christianity  had  steadily  progressed  and  the  sub- 
jugation of  the  islands  to  Spanish  rule  was  nearly  com- 
plete. 

Events  of  the  Latter  16th  Century  in  the  Philippines.— 
After  the  death  of  Legaspi,  the  Spanish  in  the  Philippines 
were  almost  immediately  engaged  in  resisting  in  1574  an 
invasion  headed  by  a  Chinese  buccaneer  commanding  over 
sixty  war  junks.     Encouraged  by  the  ease  with  which  the 
Islands  had  been  subdued  by  the  Spanish  this  expedition  of 
some  4,000  warriors,  including  1,500  women,  and  abundant 
supplies,  landed  on  the  northern  coast  of  Luzon  and  started 
toward  Manila.    After  two  unsuccessful  attacks,  during 
which  the  small  Spanish  garrison  fought  valiantly,  the  pi- 
rates sailed  away  to  the  mouth  of  the  Agno  River  in  what  is 
now  Pangasinan  Province  and  made  all  preparations  to  set- 
tle permanently.    The  following  year  a  Spanish  detachment 
aided  by  a  war  junk  sent  by  the  Emperor  of  China  routed 
the  buccaneers  and  drove  a  remnant  of  them  to  the  moun- 
tains where  their  descendants,  a  Chinese-Filipino  race,  still 
exist.    During  the  next  two  decades  the  only  important 
events  were  the  arrival  of  the  first  body  of  Franciscans,  Jes- 
uits, and  Dominicans  and  a  Spanish  expedition  to  Borneo 
and  to  the  Moluccas  against  the  Dutch.    It  was  during  this 
time  that  the  disadvantages  of  the  arrangement  whereby 
the  Philippines  were  governed  indirectly  from  Mexico  first 
became  apparent.    The  conditions  and  people  of  Mexico 
were  quite  different  from  those  of  the  Philippines  and  the 
Mexican  laws  grafted  upon  the  Oriental  colony  were  natu- 
rally unsuitable.    Legaspi  had  left  a  large  degree  of  self- 
government  to  the  local  native  communes,  but  his  successors 
gradually  abolished  this  and  a  greater  centralization  of 
authority  took  place  in  Spanish  hands.    Friction  between 


146 


TRADING  WITH  ASIA 


I 


the  church  and  the  civil  government  soon  appeared  and  in 
response  to  an  appeal  from  the  Bishop  of  Manila  the  King 
of  Spain  in  1589  defined  the  activities  of  church  and  state 
in  the  Islands,  abolished  slavery,  provided  proportionate 
tribute  to  civil,  military,  and  ecclesiastical  establishments 
and  initiated  several  other  reforms.  At  about  this  time 
the  Emperor  of  Japan  sent  an  ambassador  to  the  Spanish 
rulers  of  the  Philippines  demanding  allegiance  to  his 
throne.  After  much  parley  the  ambassador  was  so  im- 
pressed with  the  tales  of  the  greatness  of  Spain  and  her 
people  that  he  invited  a  return  embassy  to  Japan  to  nego- 
tiate a  treaty  on  a  basis  of  equality.  This  was  successfully 
accomplished  but  the  returning  envoys  were  shipwrecked 
and  the  treaty  lost.  A  second  treaty  signed  in  1593  was 
the  beginning  of  Franciscan  intercourse  with  Japan. 

The  Developments  of  the  Early  17th  Century.— The 
history  of  the  next  seventy  years  is  one  of  numerous  threat- 
ened invasions  from  without  or  ambitious  expeditions  on 
the  part  of  the  Spanish  to  bring  the  neighboring  islands  un- 
der their  control.  Thus  Viscaya,  Isabela,  and  Agayan 
were  subjugated  in  1595  but  an  expedition  to  (IJambodia 
and  to  Mindanao  was  not  so  successful.  A  massacre  of 
Spanish  priests  in  Japan  in  1597  put  an  end  to  plans  for 
Christianizing  Japan  from  Manila.  During  this  period 
the  royal  Spanish  court  of  justice  was  established  with 
jurisdiction  over  Mindanao,  Sulu,  Cambodia,  and  parts  of 
the  Moluccas  and  the  College  of  San  Jose  was  founded  in 
1600.  But  the  attention  of  the  colonists  was  frequently 
distracted  from  internal  improvement  by  threats  from  with- 
out. The  source  of  supplies  from  Mexico  was  being  con- 
stantly threatened  by  Dutch  hostility  and  many  Spanish 
supply  boats  were  seized  and  the  colonists  4:hus  reduced  to 
sore  straits.  This  enmity  between  the  two  rival  colonizing 
nations  was  not  finally  averted  until  the  restoration  of 
peace  between  the  two  countries  in  Europe  in  1763.    To 


mSTORY  OF  THE  PHILIPPINES 


147 


t 


add  to  these  difficulties  a  series  of  native  uprisings  occurred 
in  the  first  half  of  the  seventeenth  century  which  necessi- 
tated a  strengthening  of  the  armed  force,  although  the  eco- 
nomic condition  resulting  from  a  number  of  crop  failures 
and  subsequent  famines  during  this  period  may  account 
for  these  to  some  degree.  Compulsory  military  service  led 
to  a  revolt  in  Samar  in  1649  which  was  only  put  down  by 
much  show  of  force.  The  Moros  were  a  constant  source 
of  trouble  during  this  and  later  periods  and  their  trucu- 
lence  continued  under  American  rule.  With  all  these  dis- 
turbances religious  activity  continued  to  increase  and  the 
double  mission  of  the  friars,  that  of  education  and  conver- 
sion, was  becoming  constantly  a  more  successful  one. 

The  same  supervision  of  Mexico  which  had  been  found 
so  nnsuited  to  the  Philippines  politically  had  extended  also 
to  trade  and  the  restrictions  of  free  trade  with  China  and 
Japan  did  much  to  hold  back  the  economic  development  of 
the  Islands.  Yet  unsatisfactory  as  this  arrangement  was, 
it  continued  until  the  beginning  of  the  nineteenth  century. 

The  period  between  1664  and  1764  was  perhaps  the  least 
eventful  in  the  history  of  the  Islands.  A  steady  improve- 
ment in  internal  administration,  coupled  with  a  highly  sat- 
isfactory advance  of  the  Christian  faith,  was  only  occasion- 
ally marred  by  crop  failures,  epidemics,  and  Mohammedan 
and  Chinese  attacks. 

Manila  Occupied  by  the  English.— The  outbreak  of  the 
war  between  England  and  France  and  Spain  in  1762  was 
the  occasion  of  British  attacks  upon  all  Spanish  colonies 
and  a  squadron  of  thirteen  ships  was  sent  against  Manila, 
which  was  captured  after  a  short  siege,  and  the  Philippines 
remained  under  British  sovereignty  until  1764  when  the 
Peace  of  Paris  restored  them  to  Spain.  With  the  restora- 
tion of  the  Islands,  Spain  began  to  inaugurate  a  system- 
atic agricultural  development  of  the  Islands.  In  1781 
tobacco  growing  had  become  such  an  important  industry 


148 


TRADING  WITH  ASIA 


that  it  was  made  a  government  monopoly  which  it  re- 
mained for  a  century. 

Insurrections  agrainst  Spain.— Meanwhile  insurrections 
and   uprisings   were   becoming   more   and   more   serious. 
These  occurred  in  1807,   1814,  and  1823  and  finally  a 
formidable  uprising  in  Cavite  in  1872  proved  to  be  a  most 
daring  and  well  laid  plan  to  throw  off  the  Spanish  yoke. 
The  origin  of  this  revolt  was  the  native  opposition  to  the 
practice  of  Spanish  friars  retaining  parochial  benefices  to 
the  exclusion  of  native  priests.    Although  the  revolt  was 
stamped    out   the    cause    and   spirit   remained   and   only 
awaited  the  psychological  moment  to  burst  into  fiame  again. 
The  Character  of  Spanish  Rule.— The  character  of  Span- 
ish rule  did  much  to  aggravate  this  condition,  for  it  was 
not  of  the  most  tactful  and  appropriate  nature,  and  pro- 
vided no  representation  of  the  Islands  in  the  Spanish  legis- 
lature, except  during  a  brief  period,  and  when  this  was 
revoked  it  only  increased  discontent.    Toward  the  end  of 
the  nineteenth  century  certain  reforms  were  attempted, 
such  as  the  substitution  of  an  identification  paper  for  the 
payment  of  the  hated  tribute,  but  the  spirit  of  indepen- 
dence which  sought  autonomy  was  not  easily  appeased. 
The  Spanish  rule  in  the  Philippines,  however,  was  not 
without  its  good  results.     Through  the  efforts  of  the  church 
the  elevation  of  the  people  from  a  state  of  barbarism  to  a 
condition  of  comparative  civilization  was  effected.    Schools 
were  established  and  the  natives  were  admitted  to  a  small 
share  in  the  government,  while  advances  in  the  domestic 
arts  led  to  the  adoption  of  the  customs  of  living  of  their 
rulers.    Contrasted  with  the  studied  subjugation  of  the 
Javanese  by  the  Dutch  and  the  churlish  reserve  of  the  Brit- 
ish toward  their  colonies,  the  Spanish  regime  was  actually 
benevolent.    This  arose  from  the  conception  of  colonization 
held  by  the  Spanish  which  was  different  from  that  held  by 
the  English  and  Dutch.    Primarily  a  Spanish  colony  was 


HISTORY  OP  THE  PHILIPPINES 


149 


a  field  for  missionary  endeavor  and  not  for  commercial  ex- 
ploitation.   Yet,  notwithstanding  this  primary  purpose, 
conditions  developed  which  tended  to  foster  militarism,  ec- 
clesiasticism,  and  officialism,  and  where  these  are  allowed 
to  develop  they  hamper  real  economic  or  social  advanoe. 
The  return  of  young  Filipinos  who  had  studied  in  Europe 
was  the  signal  for  an  organized  attempt  to  bring  about  re- 
forms in  the  Government.    Alarmed  by  the  success  of  the 
revolution   of   Spanish   colonies  in  America,   the   revolts 
which  occurred  early  in  the  nineteenth  century  now  caused 
the  Spanish  to  enact  half-way  reforms.    Agriculture  was 
encouraged,  a  mint  was  established,  roads  and  bridges  were 
constructed,  officials  were   prohibited   from   engaging   in 
commerce,  usury  was  suppressed,  and  the  tobacco  monopoly 
established,  yet  these  belated  efforts  could  not  ameliorate  the 
narrow,  harsh,  tyrannical,  and  unprogressive  rule,  which 
discouraged  learning,  did  not  tolerate  freedom  of  opinion, 
prohibited  the  printing  of  books  and  was  reactionary  in 
every  sense.     In  1860  many  secret  societies,  including  po- 
litical affiliations  of  freemasons,  were  organized  and  the 
aims  of  these  societies,  among  which  was  **La  Liga  Filipino*' 
later  founded  by  Dr.  Jose  Rizal,  were,  briefly,  the  expulsion 
of  the  friars  and  the  confiscation  of  their  estates,  the  same 
political  autonomy  which  had  been  granted  Cuba,  a  just 
division  of  civil  and  military  posts,  the  return  to  the  own- 
ers of  land  seized  by  the  friars,  the  prevention  of  insults 
to  natives,  and  economy  in  expenditures.    Burgos,  Joena, 
and  Rizal  were  the  leading  advocates  of  these  reforms. 
RizaFs  ideas  and  ideals  were  presented  in  several  novels, 
among  which  NoU  Me  Tangere  was  a  poetic  description 
of  his  people's  faults,  aspirations,  and  wrongs. 

The  Revolt  at  Cavite.— Within  a  few  years  after  the 
publication  of  this  book,  in  1896,  the  revolt  at  Cavite  took 
place,  in  which  Aguinaldo,  a  young  Filipino  school  teacher, 
took  a  prominent  part.    The  success  of  the  revolt  was  due 


150 


TRADING  WITH  ASIA 


to  the  well  organized  secret  societies,  as  well  as  to  the 
sending  of  a  large  number  of  Spanish  troops  to  Cuba  which 
was  also  in  revolt.  Unable  to  subdue  the  inmrrectos, 
amnesty  was  offered  to  all  who  would  lay  down  their  arms, 
and  the  spirit  of  the  revolt  had  been  well  spent,  when  an 
edict  was  issued  in  1897  placing  severe  restrictions  upon 
the  movements  of  the  people.  This  fanned  the  dying  em- 
bers into  flame.  In  April,  1898,  5,000  natives  drove  the 
Spanish  from  Cebu  and  took  possession  of  Manila,  but  were 
a  few  days  later  crushingly  defeated  and  driven  to  the 
mountains.  The  United  States  soon  after  declared  war  on 
Spain  and  the  Spanish  fleet  was  destroyed  at  Cavite  and 
Manila  captured. 

Acquisition  of  the  PhUippines  by  the  United  States.— 
By  the  Treaty  of  Paris,  Spain  ceded  the  Philippines  to  the 
United  States.    Before  the  arrival  of  the  first  Philippine 
Commission  Aguinaldo  had  started  in  to  organize  an  army 
and  a  government  under  the  protection  of  American  gun- 
boats, in  the  belief  conveyed  to  him  by  the  Hongkong  Junta 
that  our  Government  would  aid  him.     However,  neither 
Admiral   Dewey  nor   General   Anderson  made   any   such 
promise.     To  the  Americans  Aguinaldo  was  the  head  of  the 
army  cooperating  with  the  American  forces.     To  the  Fili- 
pinos he  was  dictator  and  head  of  the  organized  Govern- 
ment.    His  position  was  strengthened  by  a  series  of  edicts 
and  a  military  expedition  against  the  Spanish  in  Luzon, 
although  the  United  States  was  still  negotiating  peace  with 
Spain.    The  establishment  of  the  ''Filipino  Republic"  fol- 
lowed with  Aguinaldo  as  President.    Aguinaldo 's  haste  and 
unwillingness  to  follow  American  leadership  made  a  sympa- 
thetic or  conciliatory  attitude  impossible.     The  Americans 
were  unconvinced  that  the  Filipinos  were  possessed  of  a 
suflBcient  degree  of  civilization  to  govern  themselves.     Six 
days  before  the  ratification  of  the  Treaty  of  Paris  in  Febru- 
ary, 1899,  hostilities  broke  out  between  the  Americans  and 


HISTORY  OF  THE  PHILIPPINES 


151 


the  Filipinos,  due  to  the  shooting  of  a  native  soldier  who 
attempted  to  cross  over  the  American  lines  after  darkness 
and  after  a  campaign  of  two  years  all  organized  opposition 
had  been  destroyed,  but  guerilla  warfare  continued  until 
the  capture  of  Aguinaldo  in  April,  1901.  The  insurrec- 
tion was  declared  at  an  end  on  July  1,  1901,  and  Judge 
Taft,  president  of  the  Commission,  was  made  Governor. 

The  Dutch  East  Indies 
Early  Dutch  Ventures  in  the  East  Indies.— The  war  of 
liberation  which   in   1574  had  just  been   fought  in   the 
Netheriands  had  been,  to  a  large  extent,  an  economic  war 
and  Its  successful  culmination  resulted  in  a  great  expansion 
of    Dutch    commerce.     Unlike    the    royal    expeditions    of 
Spain,  the  first  Dutch  undertakings  were  the  adventures 
of  individuals  in  search  of  profit,  and  the  East,  as  the 
source  of  untold  wealth  was  their  natural  goal.    For  better 
protection  these  individuals  sent  their  ships  together  in 
fleets  and  the  first  venture  of  this  kind  to  Java  in  1595 
resulted  in  losses  in  ships,  men,  and  money.     But  the  enor- 
mous profits  of  successful  ventures  were  so  alluring  that  a 
second  trial  was  made  and  in  1598  a  fleet  of  twenty-two 
ships  made  a  successful  return  voyage  from  the  East  Indies 
yielding  a  profit  in  spices  alone  of  four  hundred  per  cent. 
The  rush  which  ensued  to  participate  in  this  trade  resulted 
m  these  individual  ventures  suffering  many  handicaps. 
Competition  raised  prices  of  the  products  in  the  East  and 
lowered  them  at  home,  and  although  the  Dutch  Government 
counselled  harmony,  the  greed  for  individual  profit  out- 
weighed all  other  considerations.     In  1602  the  States  Gen- 
eral of  Holland  formed  by  law  the  Dutch  East  India  Com- 
pany, which  not  only  incorporated  the  traders  who  were 
engaged  in  the  East  Indian  trade  into  a  single  corporation, 
but  gave  them  and  their  successors  a  monopoly  of  the  trade 
and  powers  of  government  in  the  East  Indies  which  were 


152 


TRADING  WITH  ASIA 


practically  sovereign.  The  tendency  of  individual  ship 
captains  to  compete  for  trade  led  to  the  appointment  of  a 
Governor  General  in  1609  who  was  to  reside  in  the  East 
and  direct  the  forces  of  the  Company.  A  center  of  opera- 
tions was  selected,  therefore,  near  modem  Batavia,  to  serve 
not  only  as  a  base  of  supplies  for  the  long  inter-island 
cruisers  which  were  necessary  to  collect  products,  but  also 
as  a  good  harbor,  fortified  from  attack,  and  with  possibili- 
ties as  a  base  for  military  operations.  Thus  the  ambitions 
of  a  few  independent  Dutch  traders  had  led  in  twenty 
years  to  the  establishment  of  a  thriving  Dutch  colony. 

The  Dutch  East  India  Company. — The  small  proportion 
of  the  territory  of  the  island  of  Java  under  Dutch  control, 
however,  was  flanked  by  native  states  whose  constant  bick- 
erings led  to  a  condition  of  continual  unrest.  Moreover, 
other  European  competition  entered  into  the  trade  with 
these  independent  native  states,  and  the  protests  from  the 
Dutch  only  led  to  embargoes  placed  on  the  trade  with  the 
Dutch  by  the  native  princes.  The  products  of  these  inde- 
pendent states  were  monopolized  by  the  princes,  and  high 
prices  as  well  as  high  export  duties  were  the  rule.  The 
desire  of  the  Dutch  to  extend  their  political  influence  was 
largely  due,  therefore,  to  a  desire  to  overcome  these  restric- 
tions which  the  independent  states  imposed.  The  Dutch 
soon  developed  in  their  colonial  career  from  mere  traders 
to  politicians,  and  from  politicians  to  warriors,  each  step 
being  induced  by  the  desire  to  control  larger  areas  of 
fertile  soil  and  cheap  labor  in  order  to  obtain  greater  quan- 
tities of  products  at  a  cheaper  price.  These  territorial  ex- 
pansions were,  nevertheless,  largely  at  variance  with  the  in- 
structions from  Holland  which  followed  a  consistent  policy 
of  cultivating  the  peace  and  friendship  of  the  native  «tates 
as  far  as  possible.  But  this  policy  the  local  governor 
found  difficult  to  follow,  it  being  misinterpreted  by  the  na- 
tives as  a  policy  actuated  by  fear.    Throughout  the  seven- 


HISTORY  OF  THE  PHILIPPINES 


153 


i 


teenth  century,  therefore,  the  history  of  the  Company  was 
a  history  of  petty  wars,  which,  however,  only  increased  the 
profit  to  the  officials  and  not  to  the  Company,  inasmuch 
as  they  were  not  wars  of  conquest  but  wars  fought  on  be- 
half of  one  native  prince  against  another,  the  incommensu- 
rate territorial  gains  only  coming  to  the  Company  from  the 
victor  whom  they  had  helped,  while  the  more  concrete 
profits  and  spoils  went  to  the  officials  themselves.  To  their 
credit  be  it  said,  however,  that  the  Dutch  sought  to  aid 
always  the  legitimate  ruler  against  usurpers,  and  to  put 
down  rebellion. 

The  "Council  of  Defence. ''—The  remarkable  trade 
which  the  Company  built  up  during  the  150  years  between 
1650  and  1800  was  based  purely  on  the  principle  of  monop- 
oly. Despite  numerous  attempts  at  modification  of  this 
policy,  it  remained  the  bulwark  of  the  Dutch  struggle 
against  both  Portuguese  and  English  trade  in  the  East  In- 
dies. The  struggle  with  the  former  ended  in  1641  with  the 
capture  of  Malacca,  but  the  struggle  with  the  British  was 
more  severe.  These  two  powers,  though  normally  at  peace 
in  Europe,  were  practically  continually  at  war  in  the  East. 
By  1618  the  British  had  besieged  Batavia  four  times  with- 
out success.  In  1619  an  encounter  between  Dutch  and 
English  ships  led  to  the  formation  by  treaty  of  a  **  Council 
of  Defence"  consisting  of  an  equal  number  of  representa- 
tives from  the  British  and  Dutch  East  India  Com- 
panies. This  Council  was  to  maintain  a  fair  division 
of  the  East  Indian  trade.  In  1622  a  combined  fleet 
under  the  Council  attacked  Manila,  but  this  expedition 
ended  in  a  quarrel  and  the  break-up  of  the  Council.  The 
vague  provisions  of  the  treaty  were  impossible  of  execu- 
tion in  the  face  of  a  policy  of  monopoly  which  guided  the 
course  of  both  nations.  The  Dutch  governor  declared  in 
1622  that  friendship  with  the  English  meant  ruin  for  the 
Company.    In  1628  the  English  president  of  the  Council 


154 


TRADING  WITH  ASIA 


removed  from  Batavia  to  a  neighboring  independent  state 
of  Bantam,  from  which,  after  conquest  by  the  Dutch,  the 
English  were  forced  to  withdraw.  Thereafter  the  English 
carried  on  an  illicit  trade  with  Dutch  possessions  which  the 
Dutch  were  never  able  to  stop. 

Theories  of  Colonization  and  Free  Trade.— In  1623  a 
theory  of  colonizing  the  Dutch  possessions  in  the  Indies 
with  permanent  Dutch  residents,  who  would  take  the  place 
of  the  mercenary  armies  which  then  garrisoned  the  Dutch 
stronghold,  was  put  into  practical  effect  by  permitting  the 
Dutch  citizens  of  Batavia  to  trade  on  their  own  account  in 
the  adjoining  districts  but  the  policy  was  vetoed  by  the 
Colonial  authorities  after  a  few  years.    The  old  evils  of 
the  monopoly  system  were  again  in  evidence,  deterring  col- 
onization, and  diverting  a  rich  inter-island  trade  into  the 
hands  of  other  nationals  and  natives,  and  in  stimulating 
smuggling  by  all.     This  question  of  monopoly  versus  Dutch 
colonization  and  free  trade  is  one  which  has  agitated  the 
colony  until  the  present  time,  finding  its  present  parallel  in 
the  contrast  between  the  aims  of  the  Little  Hollander,  who 
may  be  said  to  have  inherited  the  monopolistic  idea,  and 
the  Colonial  who  is  strongly  in  favor  of  economic  and  polit- 
ical autonomy  for  the  Colony. 

Policies  of  the  Dutch  East  India  Company.— Some  other 
policies  of  the  Dutch  East  India  Company  reflected  the 
mercantilist  theories  then  popular  in  Europe.  Thus  pur- 
chases were  made  as  far  as  possible  only  with  goods  from 
Holland  rather  than  with  specie.  The  carrying  trade  was 
conducted  in  outbound  groups  generally  of  three  vessels, 
which  assembled  in  the  East  and  returned  home  in  one 
great  fleet,  annually,  in  order  to  lessen  the  danger  of  at- 
tack upon  their  valuable  cargoes.  The  cargoes  were  based 
on  a  few  easily  grown  staples  which  found  a  ready  market 
in  Europe  as  well  as  upon  products  collected  from  other 
nearby  territories.    These  consisted,  during  the  eighteenth 


HISTORY  OF  THE  PHILIPPINES 


155 


century,  of  tea  from  China,  pepper,  mace,  nutmegs,  and 
cloves  from  the  Moluccas,  and  coffee,  sugar,  camphor,  in- 
digo, and  cutch  from  Java.  The  policy  was  strictly  to  reg- 
ulate the  supply  and  to  fix  the  prices  in  Europe  in  this 
manner.  The  cargoes  from  Holland  consisted  mainly  of 
textiles. 

Trade  Control  Methods  of  the  Company. — ^At  first  the 
Company  maintained  '^factories,''  or  trading  posts,  where 
its  agents  collected  the  products  for  shipment  but  as  this 
trade  dwindled  toward  the  end  of  the  eighteenth  century, 
the  Company  became  almost  entirely  dependent  for  its 
trade  upon  products  received  as  tribute  contingents  or 
forced  deliveries  of  subject  natives.  The  first  of  these 
sources  of  supply  required  no  return  at  all,  the  second  re- 
quired only  a  nominal  return  for  fixed  amounts  of  prod- 
ucts delivered  by  the  natives  annually,  while  the  forced 
deliveries  theoretically  resembled  contracts  to  deliver  cer- 
tain products  to  the  Company  at  a  fixed  price,  but  in  prac- 
tice there  was  little  difference  between  them  and  contin- 
gents. 

The  Contingent  System.— The  contingent  system  orig- 
inated in  the  older  provinces  under  the  political  control  of 
the  Company,  which  appointed  certain  native  princes 
regents  over  large  districts  on  condition  that  they  furnish 
certain  amounts  of  products  annually,  some  free  and  some 
at  a  fixed  price,  and  also  perform  certain  military  services 
and  supply  armed  men  in  case  of  need.  These  regents  in 
turn  farmed  out  the  land  to  Javanese  laborers  who  paid 
their  rent  in  products  to  the  regents  in  such  quantities  as 
to  render  a  profit  for  the  regent  over  and  above  his  obliga- 
tions to  the  Company.  Thus  the  Dutch  showed  rare  tact 
in  adapting  their  rule  to  the  native  organization  as  they 
found  it,  for  in  addition  to  paying  prices  far  below  the 
market,  they  transferred  the  actual  work  of  administra- 
tion to  the  native  officials.    This  system,  however,  only 


r 


156 


TRADING  WITH  ASIA 


imposed  greater  hardships  upon  the  common  farmers  who 
were  thus  subject  to  a  double  exploitation.    Naturally  the 
profits  of  the  Company  under-this  system  were  handsome 
ranging  from  twelve  and  a  half  per  cent  to  fifty  per  cent 
annually  over  a  period  of  two  hundred  years. 
-  .The  Decline  of  the  Company  and  Its  FaU.— The  com- 
pany,  which   had   begun   under   such  favorable   circum- 
stances as  a  trading  corporation,  gradually  declined  as  its 
character  changed  to  that  of  a  political  ruler.    This  change 
was  due  largely  to  the  fact  that  with  growing  competition 
It  was  unable  to  make  large  enough  profits  in  the  open 
market  to  cover  the  cost  of  its  commercial  and  military 
establishment  and  still  pay  dividends.    So  recourse  was 
finally  had  almost  entirely  to  forced  deliveries  which,  while 
seemingly  cheaper  for  a  time,  simply  overburdened  the 
Company  more  and  more  with  the  debt  of  its  military 
establishment.     This  decline  began  toward  the  end  of  the 
seventeenth  century  and  by  the  middle  of  the  eighteenth 
century  the  Company's  business  was  entirely  on  a  political 
basis.    At  the  same  time  the  contingent  and  forced  deliv- 
ery systems  were  limiting  the  markets  in  the  Islands  for 
Dutch  wares,  there  being  practically  no  exchange  of  com- 
modities, although  their  commercial  rivals,  the  English, 
French,  Danes,  and  the  Arabs,  were  finding  a  ready  market 
for  their  smuggled  wares.    This  commercial  competition 
was  the  real  cause  of  the  decline,  for  while  the  Company 
stifled  Dutch  competition,  it  was  unable  to  protect  itself  in 
its  monopolistic  position  against  outsiders.    The  strength- 
ening of  the  English  in  India  was  no  small  factor  in  in- 
creasing  this  competition,  the  nature  of  which  was  not 
monopolistic  but  practically  in  the  hands  of  individual 
traders.    With  an  organization  top-heavy  with  routine,  the 
Company  was  unable  to  withstand  the  effect  of  the' Eu- 
ropean wars  of  1780  and  1795.    Futile  attempts  were  made 
to  reform  through  state  commissions  but  to  no  avaU,  and 


HISTORY  OF  THE  PHILIPPINES 


157 


finally  in  1798  the  Dutch  East  India  Company  was  abol- 
ished and  its  debts  of  about  sixty-seven  million  dollars  as- 
sumed by  the  Dutch  Government. 

Java  after  the  Fall  of  the  Dutch  East  India  Company. 
— ^With  the  downfall  of  the  Dutch  East  India  Company  in 
1798,  the  history  of  the  Dutch  in  Java  takes  a  remarkable 
turn.  The  French  Revolution  was  soon  succeeded  by  the 
rule  of  the  Emperor  Napoleon  and  the  Dutch  colonies  now 
came  under  French  influence  as  dependencies  of  the  Ba- 
tavian  Republic  and  so,  by  the  fortunes  of  war,  were  made 
the  goal  of  British  conquest.  During  the  era  directly  pre- 
ceding British  rule  there  was  little  change  in  the  Dutch 
policy  and  the  sole  aim  of  the  Government  seemed  to  be 
the  greatest  benefit  to  the  mother  country  with  no  thought 
of  reforms  in  the  Islands.  The  principal  effect  of  the 
change  from  Company  to  Government  rule  was  to  increase 
the  solidarity  and  lessen  the  ultimate  responsibility  of  the 
rulers.  The  question  of  the  Government  maintaining  the 
trade  monopoly  or  creating  another  Company  to  handle 
the  trade  independently  of  the  Government  was  paramount. 
If  the  latter  course  were  adopted,  should  the  contingents 
be  abolished  and  the  Government  assume  active  rulership 
of  the  masses  direct,  instead  of  ruling  through  the  regents  ? 
These  questions  were  the  subject  of  public  discussion  in 
Holland  for  several  years.  It  was  clearly  a  parting  of 
the  ways  and  a  form  of  the  old  system  had  either  to  be 
adopted  by  the  Government  or  an  entirely  new  system  of 
taxation  and  free  cultivation  inaugurated.  There  was  a 
strong  argument  in  favor  of  the  latter  system  in  the  exam- 
ple of  the  Chinese  districts  where  the  Chinese  exercised 
practically  the  rights  of  regents  over  a  prosperous  group 
of  farmers,  unburdened  with  contingents  or  forced  deliv- 
eries, and  where,  although  the  taxation  was  high,  it  was  at 
a  fixed  rate  and  after  its  payment  there  remained  the  in- 
centive to  produce  more,  which  added  to  the  general  pros- 


158 


TRADING  WITH  ASIA 


I 
I 


perity.  The  conditions  were  so  favorable  in  these  district* 
that  they  were  crowded  with  immigrants  from  all  the  sur- 
rounding country.  With  this  system  was  advocated  the 
policy  of  "free  trade"  with  Holland  in  all  commodities 
except  spices,  which  alone  were  to  remain  a  Government 
monopoly. 

The  Attempted  Reforms  of  I803.-Althougli  reform  in 
Java  was  recognized  as  necessary  the  time  was  not  ripe  for 
so  drastic  a  change  and  the  advocates  of  th(^  plan  were 
not  successful.     One  great  difficulty  in  its  practical  applica- 
tion  was  that  of  redistribution  of  the  land.    A  C^ommission 
appointed   in   1803  returned   a  report  unfavorable  to  a 
change  as  striving  toward  something  impossible  of  achieve- 
ment     The  contingent  system  was  continued  as  being  best 
calculated  to  retain  the  cooperation  of  the  native  rulers. 
Ihe  Government  in  thus  succeeding  the  Company  was  to 
undertake  to  regulate  abuses,  improve  the  condition  of  the 
people,  and  abolish  all  but  regular  taxes.    The  Commis- 
sion, however,  recommended  abandonment  of  all  monopolies 
except  coffee,  pepper,  and  spices  and  ships  of  friendly 
powers  were  welcomed  to  trade.     The  powers  of  the  Asiatic 
Council,  which  succeeded  the  Dutch  East  India  Company 
were  also  considerably  restricted,  and  improvement  in  fiscal 
administration  and  control  were  provided  for. 

The  Work  of  Governor  General  Daendels.— In  1806  the 
Asiastic  Council  was  dissolved  by  King  Louis  Napoleon 
who  had  ascended  to  the  throne  in  Holland,  and  a  new  Gov- 
ernor Genera]  named  Daendels  was  appointed  who  had 
gained  his  appointment  solely  as  a  reward  for  military 
service  under  the  French  in  Holland.  Due  to  difficulties 
of  communication  he  received  no  instructions  from  home  for 
two  years  and  being  left  to  his  own  resources  proceeded  in 
a  rough  and  ready  fashion  to  right  what  wrong  conditions 
he  saw.  Among  other  things  he  sought  to  reform  not  only 
the  scheme  of  administration  but  also  the  system  of  pro- 


HISTORY  OF  THE  PHILIPPINES 


159 


motions  and  pay  of  the  Dutch  officials  so  as  to  make  honest 
government  possible.  The  judiciary  was  also  overhauled 
and  important  changes  in  the  relations  of  the  native  regents 
to  the  Government  instituted. 

British  Occupation  and  Reforms  of  Raffles.— Batavia 
had  been  blockaded  by  a  British  squadron  in  1800  and  at 
intervals  of  several  years  after  that  hostile  demonstrations 
by  British  fleets  had  been  made  off  the  coast.  Finally  in 
1811  a  joint  expedition  on  the  part  of  the  British  Govern- 
ment and  the  British  East  India  Company  was  success- 
ful in  driving  out  the  Dutch  and  from  then  until  1816  it 
was  ruled  as  part  of  British  India.  The  British  Governor, 
Sir  Stamford  Raffles,  now  began  a  career  which  was  most 
successful  and  fruitful.  Although  some  of  his  plans  were 
not  carefully  executed,  he  displayed  a  wonderful  energy 
and  established  high  ideals  of  service.  His  notable  re- 
forms were: 

1.  The  entire  abolition  of  forced  delivery  and  the  es- 
tablishment  of  perfect  freedom  in  cultivation  and  trade. 

2.  The  assumption  by  the  Government  of  the  direct 
superintendence  of  lands  and  their  revenues  and  the  desig- 
nation of  the  native  regents  merely  as  public  officials  in- 
stead of  dependent  rulers  of  districts. 

3.  The  renting  out  of  such  lands  in  large  and  small 
estates  on  leases  for  a  moderate  term. 

This  constituted  a  most  sweeping  change  in  the  Govern- 
ment of  the  Islands.  The  native  regents  were  deprived  of 
the  opportunity  of  squeezing  the  native  farmers,  and  Euro- 
pean officials  were  to  replace  them  and  administer  a  new 
fiscal  system.  Government  taxes  were  based  strictly  upon 
the  rental  value  of  lands,  instead  of  on  private  agreements 
between  farmers  and  regents.  Finally,  the  Government 
abolished  indirect  taxation  in  the  shape  of  internal  tolls 
and  transport  duties  and  instead  of  farming  out  the  cus- 
toms took  them  under  its  own  administration.     In  Raffles  *s 


I 

I 


160 


TRADING  WITH  ASIA 


system  the  land  tax  was  the  principal  feature  and  it  ab- 
sorbed all  the  many  dues  and  services  under  native  rule. 
The  practical  difficulties  to  be  met  and  overcome  were 
very  great  and  a  beginning  had  only  been  made  by  the 
time  the  Dutch  regime  was  restored  in  1816. 

The  Restoration  of  Dutch  Rule;  the  Dutch  Trading 
Company.— The  period  of  British  rule  marks  a  turning 
point  in  the  history  of  the  Dutch  East  Indies  and,  although 
the  Dutch  inherited  an  undesirable  mixture  of  the  old  and 
new  system,  they  proceeded  to  straighten  out  their  difficul- 
ties with  celerity.  The  first  correction  to  be  effected  was 
that  of  the  land  tax  which  was  found  difficult  to  collect 
and  insufficient  for  administration  needs.  After  an  in- 
vestigation in  the  best  method  to  pursue,  the  Dutch  commis- 
sioners decided  to  depend  primarily  upon  taxes  for  rev- 
enues and  especially  upon  an  improved  land  tax.  The 
provincial  administrative  system"  established  by  Raffles  was 
retained  and  further  reforms  in  the  European  civil  service 
inaugurated.  During^  this  period  trade  was  jealously 
guarded  by  the  Dutch  who  looked  with  displeasure  upon  the 
increasing  participation  of  English  and  American  shipping 
in  the  commerce  with  the  Islands. 

In  1824  the  Dutch  Trading  Company  was  established  in 
order  to  strengthen  the  hold  of  the  individual  Dutch  mer- 
chants upon  the  growing  trade  of  the  Islands  by  amalga- 
mating their  interests,  without  adding  any  monopolistic 
features  or  rights  to  impose  forced  culture. 

The  Culture  System  and  Its  Failure.— The  culture  sys- 
tem was  introduced  in  1830  and  provided,  briefly,  that  the 
natives  put  at  the  disposal  of  the  Government  a  certain 
proportion  of  their  land  and  labor  time  and  their  taxes 
should  be  paid  in  products  for  export  grown  under  the 
direction  of  the  Government,  which  agreed  to  bear  the 
losses  of  crop,  failures  not  due  to  the  fault  of  the  cultivat- 
ors, and  also  pay  a  small  price  for  the  products  furnished. 


HISTORY  OF  THE  BHILIPPINES 


161 


Where  this  system  was  applied  to  parts  of  Java  especially 
suited  to  the  cultivation  of  the  required  products,  such  as 
coffee,  pepper,  spices,  etc.,  the  natives  gained  by  it,  but  in 
its  general  application  it  was  oppressive.  Notwithstanding 
this  drawback,  the  Islands  became  very  prosperous  during 
the  period  from  1830  to  1870.  By  1851  most  of  the  very 
oppressive  cultures  had  been  removed  and  the  Government 
adopted  the  principle  of  limiting  its  culture  crop  to  one- 
fifth  of  the  natives'  land.  In  1860  parliamentary  attention 
in  Holland  was  first  directed  against  the  culture  system 
and,  after  a  long  struggle  during  which  the  fates  of  several 
Ministries  were  involved,  the  culture  system  was  abolished 
in  1870.  With  the  abolishment  of  the  culture  system  the 
modern  era  of  Dutch  rule  in  the  East  Indies  may  be  said  to 
have  begun. 


Questions 

1.  Describe  the  settlement  and  pacification  of  the  Philippines. 

2.  Why  was  it  necessary  to  form  and  extend  the  political  power 

of  a  monopolistic  company  in  order  to  carry  on  the  early 
trade  of  the  Dutch  East  Indies? 

3.  Why  was  the  "Council  of  Defence"  formed  and  why  did  it 

fail? 

4.  Describe  the  contingent  system. 

5.  What  caused  the  decline  of  the  Dutch  East  India  Company? 

6.  What  were  the   advantages   and   disadvantages  of   Spanish 

rule  in  the  Philippines  in  the  nineteenth  century? 

7.  What  caused  4;he  rupture  between  Aguinaldo  and  the  United 

States?    Describe  the  results. 

8.  What  reforms  were  contemplated  by  the  Dutch  after  the 

downfall  of  the  Dutch  East  India  Company? 

9.  What  three  reforms  did  the  British  under  Raffles  institute? 
10.  Describe  the  culture  system. 


CHAPTER  X 

MODEEN   GOVERN-MENT   POLICIES   IN   THE  DUTCH  EAST   im)IES   AND 

THE  PHILIPPINES 

The  Dutch  Indies 

The  Government  of  the  Dutch  East  Indies.— The  Dutch 
East  Indies  government  is  divided  into  three  distinct  parts. 
The  general  legislative  branch  is  located  at  The  Hague,  in 
Holland.     The    central    colonial    government    at    Batavia, 
Java,  legislates  and  administers  the  details  of  the  general 
policies  formulated  in  Holland,  while  provincial  and  local 
administrations  are  confronted  with  the  task  of  actually 
administering  the  laws  thus  formulated.     The  legislative 
power  which  was  exercised  in  the  early  nineteenth  century 
by  the  Governor  General  has  been  almost  entirely  trans- 
ferred to  the  Dutch  Legislature  and  the  Dutch  monarch. 
The  Legislature  has  not  entirely  superseded  the  exclusive 
power  formerly  exercised  by  the  monarch  in  the  early  part 
of  the  nineteenth  century  and,  the  Queen,  acting  through 
her  Minister,  is  still  the  most  influential  organ  of  colonial 
government.     The  Minister  is  responsible,  of  course,  to  the 
Dutch  Legislature  which,  however,  seldom  makes  use  of  its 
prerogative  to  control  colonial  policy,  and  most  of  the  im- 
portant laws  affecting  the  colony  are  fiat  laws  of  the  Min- 
ister.    He  also  appoints  colonial  officials  and  performs  nec- 
essary executive  acts.     The  disadvantage  in  thus  vesting 
legislative  power  in  a  single  official,  whose  position  is  de- 
pendent upon  political  conditions  at  home  and  who  holds 
office  for  only  a  comparatively  short  time,  as  a  rule,  is 
the  obvious  one  of  a  lack  of  consistent  colonial  policy,  and 
a  remedy  for  this  condition  has  been  sought  in  the  pro- 

162 


MODERN  GOVERNMENT  POLICIES 


163 


posal  to  establish  an  advisory  council,  permanently  ap- 
pointed, who  would  form  the  basis  of  a  stable  policy. 

It  is  only  through  its  control  of  the  finances  that  the 
Dutch  Legislature  has  exercised  any  considerable  control 
over  the  Indian  colonies.  But  it  has  been  repeatedly  held 
that,  because  of  the  lack  of  interest  and  knowledge  of  colo- 
nial affairs  on  the  part  of  Dutch  legislators,  the  financial 
control  of  the  colony  from  Holland  is  disadvantageous. 
This  would  seem  a  reasonable  attitude,  inasmuch  as  the 
Dutch  legislators  are  expected  to  have  only  a  knowledge  of 
Dutch  domestic  affairs,  and  the  number  of  colonial  special- 
ists among  them  are  very  few.  From  every  point  of  view 
there  seems  no  valid  reason  why  colonial  autonomy  in  finan- 
cial and  other  important  legislative  control  is  not  dictated 
both  by  reason  and  by  considerations  of  good  government. 
Several  proposals  for  remedying  the  situation  such  as  the 
establishment  of  local  self-government  in  Dutch  India,  and 
the  establishment  of  a  special  *4mperiar*  Parliament,  with 
colonial  representatives,  have  been  advanced,  but  there  is 
little  likelihood  of  their  immediate  adoption. 

The  Power  of  the  Governor. — The  principal  feature  of 
the  Dutch  Government  in  India  is  the  great  power  wielded 
by  the  Dutch  Colonial  Governor,  who  is  responsible  directly 
to  the  Crown.  Without  any  serious  limitation  to  his  pow- 
ers, either  legislative,  or  administrative,  in  India,  the  only 
checks  upon  his  exercise  of  enormous  and  arbitrary  power 
have  come  from  the  home  Government,  which  has  shown  a 
tendency  to  supersede  him  in  many  ways.  The  improve- 
ment in  means  of  communication,  in  recent  years,  has  only 
seemed  to  emphasize  this  tendency,  although  the  Governor 
General  still  maintains  an  important  position,  and  his  ad- 
vice certainly  influences  the  determination  of  Dutch  colo- 
nial policy.  A  council  of  five  members  appointed  by  the 
home  Government  assists  the  Governor  General  in  legislat- 
ing and  decides  upon  all  projects  of  law,  subject  to  his 


164 


TRADING  WITH  ASIA 


approval,  which  in  turn  must  be  upheld  by  the  home  Gov- 
ernment.   With  a  few  exceptions,  however,  the  Governor 
General  is  the  only  responsible  colonial  official  in  both  legis- 
lation and  administration.    Under  him,  and  entirely  sub- 
ordinate to  him,  are  five  departments,  the  heads  of  which, 
however,  lack  the  responsibility  and  independence  of  min- 
isters in  a  parliamentary  government.    The  General  Secre- 
tariat of  the  Governor  General  conducts  his  correspond- 
ence and  publishes  his  orders,  and  the  position  of  this 
body  is  peculiarly  important,  in  that  it  acts  independently 
in  giving  form  and  substance  to  the  expression  of  his  will. 
The  Provincial  Administration  of  the  Colonial  Govern- 
ment.— The  provincial  administration  of  the  Dutch  Indian 
Government  is  the  branch  which  has  been  developed  with 
greatest  difficulty.     Through  it  a  distinctly  European  ad- 
ministration seeks  to  control  a  great  native  organiasation, 
whose  very  nature  is  so  primitive  as  to  be  far  behind  that 
of  the  West.    The  provincial  officials,  therefore,  must  re- 
main European  in  ideal  and  purpose,  but  become  native  in 
practice  and  performance.    Through  them  the  two  peoples, 
the  Dutch  and  Javanese,  are  interpreted  to  each  other, 
and  Javanese  problems  are  translated  into  Dutch  legisla- 
tion, which  in  turn  must  be  administered  according  to 
native  rules.    These  officials  include  22  residents,  78  assist- 
ant residents,  165  controleurs  of  three  classes,  72  regents, 
434  district  heads,  and  1,033  under  district  heads  of  two 
classes.    A  residency  is  the  size  of  a  New  England  county, 
and  the  resident,  who  rules  over  about  a  million  people, 
compares  somewhat  with  the  French  prefect  in  his  many 
duties.    These  are  administrative,  legislative  of  a  minor 
nature,  judicial,  fiscal,  political,  and  diplomatic.    He  must 
protect  the  natives  from  oppression,  maintain  peace,  en- 
courage agriculture   and   education,   and   guard  religion. 
His  assistants  rule  over  subdivisions  of  the  regency,  per- 
forming all  his  duties  except  that  of  legislating,  and  estab- 


I 


MODERN  GOVERNMENT  POLICIES 


165 


lish  contact  with  the  native  officials,  the  regents.  The  con- 
troleurs are  the  lowest  European  officials  in  the  actual  ad- 
ministration under  the  regent  and  his  assistants.  Their 
position  is  theoretically  perfunctory,  but,  actually,  by  com- 
ing in  daily  contact  with  the  native  regents,  they  occupy 
positions  of  much  local  importance,  and  exercise  much  in- 
fluence upon  affairs.  The  native  regents  who  exercise  the 
immediate  rule  over  the  natives  are  of  princely  rank,  and 
are  responsible  for  the  conduct  of  their  subjects.  Their 
hereditary  succession  is  maintained  and  the  Government 
thereby  gains  the  prestige  and  influence  of  the  old  native 
rulers.  The  district  heads  are  appointed  by  the  regent 
and,  being  in  close  contact  with  the  lower  Dutch  officials, 
are  directly  subject  to  Dutch  administration  rather  than 
to  the  regent,  much  of  whose  authority  they  exercise.  Be- 
low these  officials  are  heads  of  village  groups  whose  prin- 
cipal point  of  contact  is  the  district  head.  These  village 
officials  are  important  in  apportioning  the  land  tax,  but  oth- 
erwise exercise  little  influence. 

Evils  of  Dutch  East  Indian  Government. — There  are 
many  evils  in  the  centralized  form  of  Dutch  administration 
in  India.  By  concentrating  all  collections  and  all  pay- 
ments of  revenue  in  one  central  office,  extravagant  demands 
are  made  by  local  officials  out  of  all  proportion  to  their 
contributions,  and  great  difficulty  is  experienced  in  making 
a  wise  apportionment  of  expenditure.  Due  to  the  press  of 
business  upon  the  central  Government,  local  matters  of 
much  importance  are  left  unattended  to,  resulting  in  dis- 
satisfaction and  discord.  A  general  reorganization  of  the 
central  Government  seems  necessary,  which  would  restrict 
the  influence  and  power  of  the  Secretariat,  and  place 
greater  emphasis  upon  more  independent  cooperation  be- 
tween the  Governor  General  and  the  heads  of  his  depart- 
ments. With  a  view  to  giving  greater  rights  to  the  local 
inhabitants,  provincial  councils  have  been  suggested  which 


166 


TRADING  WITH  ASIA 


u 


are  to  be  composed  of  European  and  native  official*,  and 
private  European  and  native   individuals  designated  by 
the  Governor  General.     They  should  pass  upon  matters  of 
public  works,  agriculture,  and  industry,  and  for  these  pur- 
poses  should  be  allowed  to  expend  about  a  third  of  their 
revenue.     Under  the  present  system  many  misuses  of  power 
by  European  officials  are  noted.     Improper  gains  from  auc- 
tions and  notarial  functions,  receiving  of  presents,  and 
misuse  of  natives  for  personal  service  have  attracted  the 
attention  of  the  central  Government.     The  chief  result  of 
too  great  centralization  is  the  fact  that  minor  faults  of  the 
central  administration  become  greatly  intensified  as  they 
pass  down  the  scale  of  authority.    Although  schools  have 
been  formed  to  train  native  officials,  many  of  them  are  with- 
out such  training.    As  a  result  many  faults  are  observable 
m  them,  such  as  the  willingness  to  take  advantage  of  op- 
portunities for  abuse  of  power,  and  the  lack  of  independence 
m  seeking  to  placate  the  Dutch  superiors.     These  weak- 
nesses only  call  for  European  officials  of  qualities  above  the 
average,  whose  training  should  be  specialized  in  the  social 
and  political  organizations  of  the  East.    The  Dutch  have 
exhibited  several  good  sides  in  their  colonial  administra- 
tion, and  not  the  least  of  these  has  been  a  studied  attempt 
to  further  close  and  confidential  relations  between  Euro- 
pean and  native  officials,  rather  than  maintain  an  impos- 
ing aloofness  and  reserve  which  smacks  of  terrorism.     In 
order  to  obtain  officials  who  will  further  these  ends  a  well 
established  system  of  education  and  selection,  coupled  with 
a  satisfactory  arrangement  for  pay  and  promotion,  has  ren- 
dered the  provincial  government  service  attractive  to  good 
men. 

Considerations  Affecting  Colonial  Government  in  the 
Tropics.— The  prime  consideration  underlying  the  modem 
development  of  the  Far  Eastern  tropics  is  the  fact  that  na- 
ture  is  so  bountiful  in  supplying  so  full  a  satisfaction  of  the 


MODERN  GOVERNMENT  POLICIES 


167 


wants  of  the  native  that  the  trader  or  employer  has  little 
hold  upon  him.  It  was  for  this  reason,  rather  than  be- 
cause of  any  undue  greed  or  selfishness  on  the  part  of  the 
Dutch,  that  the  culture  system  was  so  long  maintained. 
It  was  held  that  without  some  system  of  forced  growths, 
there  would  be  no  cultivation  at  all  of  those  articles  re- 
quired for  export,  because  there  were  practically  no  wants 
of  the  native  which  could  not  be  filled  with  a  slight  effort 
at  serious  cultivation  of  the  land.  The  institution  of  slav- 
ery in  the  tropics  is  largely  the  result  of  an  effort  to  find  a 
basis  of  exchange  between  the  natives  and  the  foreign  trad- 
ers. This  is  brought  about  by  the  introduction  of  coolies 
from  other  countries  where  the  pressure  of  population  is 
very  great.  These  are  indentured  and  forced  to  work  for  a 
period  of  years  and  thus  supply  not  only  the  labor  re- 
quired in  large  undertakings,  but  automatically  a  market 
for  certain  foreign  products  which  the  natives  do  not  de- 
mand. It  is  significant  that  the  plentifulness  of  nature  in 
the  tropics  causes  the  native  to  be  improvident  and  little 
value  is  attached  to  future  supplies  of  goods.  For  the 
same  reason,  perhaps,  future  labor  is  held  in  just  as  small 
esteem  and  promises  for  future  returns  in  labor  are  easily 
obtained  in  exchange  for  present  enjoyment.  Thus  by 
what  is  termed  credit  bondage  many  industrial  undertak- 
ings have  been  established  and  maintained.  While  this 
extends  trade  for  a  time,  it  has  been  held  that  it  checks 
the  growth  of  true  civilization  on  the  part  of  the  native, 
and  leads  to  no  permanent  increase  in  the  wealth  of  the 
country,  but  in  as  much  as  humanity  cannot  pass  directly 
from  savagery  to  higher  civilization  some  form  of  prelim- 
inary servitude  seems  almost  essential.  The  great  merit  in 
credit  bondage  lies  in  the  fact  that  it  leaves  all  action  to  in- 
dividuals, and  requires  only  regulation  by  the  State.  Be- 
fore the  coming  of  the  foreigner  to  the  Far  Eastern  tropics 
it  had  a  distinct  place  in  the  social  system  and  gave  the 


168 


TRADING  WITH  ASIA 


creditor  full  power  over  the  person,  and  even  the  family  of 
the  debtor.  While  not  slavery  in  its  inception,  there  wa« 
every  probability  that  the  debtor  could  never  pay  the  debt, 
and  his  position  would  become  perpetually  that  of  a  subject 
to  the  creditor. 

Credit  Bondage. — The  institution  of  credit  bondage  as  a 
successor  to  the  culture  system  in  the  Dutch  East  Indies  wa« 
meant  to  educate  the  native  both  as  a  consumer  as  well  as 
a  producer.  But  for  some  time  after  its  abolition  the  na- 
tives tended  to  revert  to  their  old  hand  to  mouth  system  of 
production  and  worked  only  enough  to  obtain  what  they 
had  before  received,  but  which  they  now  procured,  of 
course,  with  much  less  labor.  Political  pressure  continued 
for  many  years  to  dominate  the  procuring  of  labor,  and  the 
good  will  of  the  headman  of  a  village  was  all  that  was  nec- 
essary to  obtain  any  amount  of  native  contract  labor. 

Credit  Advances  as  an  Inducement  to  Labor. — In  the 
case  of  the  independent  laborers,  however,  the  great  pro- 
ductiveness of  the  land  made  it  difficult  for  Europeans  to 
induce  them  to  work  other  than  independently.  With 
small  wants  the  scale  of  living  remained  low  and  the  na- 
tives evinced  no  ambition  to  better  their  mode  of  living. 
The  practice,  therefore,  grew  up  of  offering  a  large  part 
of  future  wages  in  advance,  and  lured  on  by  the  bait  of 
immediate  enjoyment  the  native  would  bind  himself  to  work 
for  a  stipulated  time.  This  system  of  advances  to  secure  the 
services  of  laborers  has  been  found  effective,  and  is  prac- 
ticed at  the  present  time  all  over  the  Dutch  East  Indies. 
The  Government,  however,  does  not  permit  contracts  to  run 
for  more  than  five  years,  and  stipulates  that  full  specifica- 
tions of  the  services  to  be  rendered,  and  the  pay  to  be 
given,  should  be  contained  in  the  contract.  Breach  of  con- 
tract became  very  prevalent,  however,  and  under  a  law 
passed  in  1872  punishing  offenses  of  this  kind  there  were 
9,000  cases  tried  in  three  years,  but  the  opinion  of  theorista 


MODERN  GOVERNMENT  POLICIES 


169 


in  Holland  opposed  this  legislation  as  reactionary,  and  it 
was  repealed  in  1877.  Cases  of  breach  of  labor  contract 
are  now  tried  before  regular  tribunals,  where  it  is  necessary 
to  prove  that  the  laborer  intended  to  desert  when  he  made 
the  contract.  The  difficulty  experienced  in  doing  this  has 
had  bad  economic  results,  and  reform  in  this  respect  is  de- 
manded. 

"Particular"  and  Other  Land  Tenure. — The  so-called 
** particular*'  lands  which  resulted  from  the  land  sales  of 
the  Government  from  1800  to  1830  have  resulted  in  the  own- 
ership of  certain  lands  over  which  the  proprietor  exercises 
certain  ** particular' '  rights.  On  these  lands  he  exacts  dues 
in  labor  and  goods  from  the  natives,  appoints  a  headman 
to  exercise  the  functions  of  communal  government.  These 
lands  are  not  numerous,  and  the  population  thus  affected 
amounts  to  less  than  two  per  cent  of  the  population,  but 
many  abuses  have  crept  in  through  their  ownership  by  ab- 
sentee landlords,  stock  companies,  and  Chinese,  and  there 
is  agitation  for  their  abolition.  Over  all  other  lands  the 
power  of  the  Government  is  supreme. 

Problems  of  Land  Tenure. — The  problems  of  the  present 
Government,  so  far  as  the  land  tenure  is  concerned,  are 
largely  dependent  upon  an  equitable  solution  of  the  vexed 
questions  which  have  arisen  out  of  the  preceding  centuries 
of  instability  and  change.  Land  devoted  to  rice  culture 
must  be  guarded  closely  to  insure  a  steady  food  supply. 
This  is  especially  true  in  view  of  the  fact  that  such  land  is 
particularly  well  adapted  to  the  growth  of  export  crops  like 
sugar,  tobacco,  and  indigo,  and  is  eagerly  sought  for  by 
unscrupulous  exploiters.  The  Government  has  taken  the 
property  right  in  the  land  and  the  natives  in  hereditary  pos- 
session, interfering  as  little  as  possible  with  the  native  cus- 
toms of  land  tenure.  Foreigners  can  only  lease  land  culti- 
vated by  natives  for  a  short  time,  under  many  restrictions. 
These  limit  the  term  of  the  lease  to  12  years,  while  com- 


I 


*  Hi 


^   ' 


170 


TRADING  WITH  ASIA 


munal  lands  may  be  leased  in  block,  for  a  period  of  five 
years,  by  a  two-thirds  vote  of  the  village  community. 

The  **Net  Profit  System.**— In  1864  the  Dutch  India 
budget  had  been  placed  under  the  Holland  Goveniment, 
and  although  it  limited  the  power  of  the  Governor  General, 
the  **net  profit  system*'  remained  whereby  the  Dutch  in 
Holland  received  the  annual  surplus  from  their  depend- 
encies. This  ranged  from  4  to  16  million  dollars  per  year. 
The  injustice  of  this  arrangement  was  overcome  in  1878, 
when  the  expenses  of  carrying  on  the  war  witli  the  unsub- 
dued tribes  of  Sumatra  caused  this  surplus  to  vanish,  and 
since  that  timje  the  expenditures  of  the  colony  have  almost 
entirely  exceeded  its  income.  In  1870  a  movement  was 
started  to  gradually  change  the  culture  of  sugar,  one  of 
the  two  remaining  forced  cultures,  to  free  culture  and  by 
gradually  diminishing  the  amount  of  land  and  labor  owned 
by  the  natives.  This  necessitated  higher  wages  to  the  lib- 
erated natives,  as  well  as  payment  for  their  land  and  a 
tax  on  the  sugar  produced,  but  in  spite  of  these  gains  to 
the  natives  and  the  slight  loss  in  Government  revenues,  the 
planters*  profits  increased,  and  production  rose  300  per  cent 
in  fifteen  years.  The  period  after  1884,  however,  was  fol- 
lowed by  a  severe  depression  in  the  sugar  industry,  due  to 
increased  sugar  beet  production  by  the  bounty  system  in 
Europe.  This  depression,  which  Would  have  entirely 
crushed  the  industry  under  the  <»ulture  system,  has  been 
met  successfully  by  the  freed  culture  system  and  the  en- 
ergy and  economy  of  the  individual  planter,  since  the  final 
abolishment  of  the  sugar  culture  system  in  1898,  following 
its  practical  suspension  since  1870,  has  resulted  in  consider- 
ably reduced  costs  of  production. 

The  Retention  of  the  Coffee  "Culture.**— The  other  cul- 
ture reserved  to  the  Government,  on  the  abolishment  of  the 
culture  system  in  1870,  was  the  coffee  culture,  which  is 
still  maintained  and,  this  alone,  under  the  old  system,  re- 


MODERN  GOVERNMENT  POLICIES 


171 


turned  four-fifths  of  the  total  revenue  from  sale  of  gov- 
ernment products.  This  has  led  to  its  survival  as  a  cul- 
ture after  all  others  have  been  abolished.  The  whole  coffee 
culture  can  be  carried  on  by  the  natives,  and  requires  no 
elaborate  machinery.  This  culture,  however,  is  rapidly 
passing  away,  and  the  change  to  complete  freedom  in  all 
culture  in  the  colony  is  only  a  question  of  time. 

The  Philippines 

Modem  Government  and  Policies  of  the  Philippines. — 

It  is  the  universal  rule  in  the  history  of  every  nation,  that, 
upon  reaching  a  certain  stage  in  economic  development,  it 
has  embarked  upon  enterprises  of  territorial  expansion. 
This  rule  is  common  to  all  races,  in  all  climates,  under 
every  form  of  government,  and  America's  adventure  in  the 
Philippines  is  more  attributable  to  this  natural  tendency  in 
human  evolution  than  to  any  abnormal  development  in  our 
national  life.  On  the  other  hand,  the  American  occupa- 
tion of  the  Philippines  has  been  characterized  by  independ- 
ent and  original  experiments  in  colonial  government,  in- 
duced either  by  blindness  to  local  conditions  or  contempt 
for  universal  experience,  and  carried  out  in  a  spirit  of  de- 
tached disinterestedness  which  is  largely  accountable  for 
their  success. 

The  Continued  Activities  of  Aguinaldo. — Aguinaldo  and 
his  followers  had  left  the  Philippines  in  1897,  after  the 
Treaty  with  Spain,  but  suspecting  that  Spain  did  not  in- 
tend to  carry  out  the  terms  of  the  Treaty  and  institute  the 
reforms,  they  had  begun  to  plot  another  revolution,  with  the 
avowed  motive  of  achieving  the  political  independence  of 
the  Philippines.  Of  this  the  American  authorities  at  Singa- 
pore and  Hongkong  were  aware,  and  the  proclamation  that 
Aguinaldo  issued,  on  his  arrival  at  Cavite,  was  actually 
drafted  by  an  American  official  at  Hongkong.  Aguinaldo 
was  taken  to  Manila  in  an  American  transport,  was  permit- 


172 


TRADING  WITH  ASIA 


ted  to  seize  Spanish  arms  in  Cavite,  and  encouraged  to  start 
the  insurrection  of  1898 ;  and  this  encouragement  was  given 
after  he  had  declared  his  intention  of  establishing  an  inde- 
pendent Philippine  Government.  While  it  is  true  that 
neither  Admiral  Dewey,  nor  any  other  agent  of  the  Ameri- 
can Government,  gave  Aguinaldo  any  assurance  that  the 
United  States  would  recognize  Philippine  independence,  he 
was  conveyed  to  the  Islands  under  circumstances  implying 
a  recognition  of  his  purposes,  but  without  any  knowledge  on 
the  part  of  Admiral  Dewey  as  to  what  the  United  States* 
policy  would  be  in  case  the  Philippines  were  taken  from 
Spain.  On  June  16,  1898,  Secretary  Hay  wrote  to  the 
Consul  at  Singapore  to  the  eflPect  that  the  United  States 
looked  upon  the  Philippine  insurgents  as  discontented  and 
rebellious  subjects  of  Spain,  and  was  not  acquainted  with 
their  purposes.  Any  other  impression  which  the  Consul 
had  given  General  Aguinaldo  was  unauthorized.  There  is 
no  evidence  that  this  pronouncement  was  ever  given  pub- 
licity at  the  time,  or  communicated  either  to  Aguinaldo 
or  the  military  and  naval  commanders  in  the  Philippines. 
Indeed  the  correspondence  between  Generals  Anderson  and 
Otis  with  Aguinaldo  after  that  date  prove  that  such  a  policy 
was  unknown  to  them. 

In  January,  1899,  after-  the  proclamation  of  the  assump- 
tion of  governing  power  by  the  United  States,  it  was  evident 
that  the  American  forces  and  those  of  the  insurgent  leader 
could  remain  in  their  undefined  positions  no  longer  and 
after  vainly  endeavoring  to  force  American  action,  on  Feb- 
ruary 4,  1899,  hostilities  were  begun  which  were  to  result 
in  the  downfall  and  capture  of  the  insurgents  under  Aguin- 
aldo. 

The  Arrival  of  the  Philippine  Commission.— The  Philip- 
pine Commission  which  arrived  the  next  month  was  not 
invested  with  any  authority  to  intervene  in  the  military 
situation.    After  a  month's  survey  of  the  situation  it  issued 


MODERN  GOVERNMENT  POLICIES 


173 


a  proclamation  which  declared  that  American  supremacy 
must  be  upheld  at  whatever  cost,  and  that  '*the  object  of 
the  American  government  was  the  well  being,  the  pros- 
perity, and  happiness  of  the  Philippine  people,  and  their 
elevation  to  a  position  among  the  most  civilized  peoples  of 
the  world."  These  reforms  were  to  be  effected  briefly 
through  the  reformation  of  all  branches  of  the  public  ser- 
vice, and  the  corporations  and  associations  affecting  the 
lives  of  the  people;  through  the  establishment  of  schools; 
through  the  encouragement  of  trade,  agriculture,  and  in- 
dustry; through  the  construction  of  roads,  railroads,  and 
public  works ;  and  through  the  introduction  of  a  sound  sys- 
tem of  taxation.  These  reforms  were  to  be  accompanied 
by  granting  to  the  people  **  ample  liberty  of  self-govern- 
ment reconcilable  with  the  maintenance  of  a  wise,  just, 
stable,  effective,  and  economical  administration  of  public 
affairs,  and  with  sovereign  and  international  rights  and 
obligations  of  the  United  States." 

On  September  1,  1900,  the  legislative  power  was  trans- 
ferred from  the  military  governor  to  the  Philippine  Com- 
mission, under  William  H.  Taft,  and  on  the  same  day  a 
year  following  the  civil  executive  power  was  also  trans- 
ferred to  the  Commission,  which  was  enlarged  to  include 
three  Filipino  members.  _   _y^ 

The  First  American  Grovemment. — The  lowest  rungs  of 
the  ladder  of  the  first  American  Government  set  up  in  the 
Philippine  were  the  municipal  councils,  which  corre- 
sponded to  the  New  England  township  and  numbered  623, 
with  3,600  presidents,  secretaries,  treasurers,  clerks,  and 
8,000  councilors.  These  were  all  elected  by  the  people  and 
any  male  of  23  or  over  having  six  months'  residence  in  a 
municipality  could  vote,  provided  he  had  held  certain 
offices  under  the  Spaniards,  or  owned  $250  worth  of  real 
estate,  or  paid  $15  or  more  in  taxes,  or  spoke,  read,  and 
wrote  English  or  Spanish. 


p 


174 


TRADING  WITH  ASIA 


These  councils  raised  and  disbursed  money  for  local  pur- 
poses such  as  schools,  police,  etc.,  but  their  early  operations 
were  not  satisfactory  because  of  the  anxiety  of  higher  of- 
ficials to  assure  their  own  salaries  from  the  public  coffers 
first,  at  the  expense  of  all  other  needs. 

The  provincial  governments  were  controlled  by  provincial 
boards  consisting  of  a  provincial  Governor  elected  by  the 
municipal  councilors  of  the  Province  for  a  two-year  term, 
and  the  provincial  supervisor  and  treasurer,  who  were  ap- 
pointed by  the  Philippine  Commission.  The  duties  of  these 
boards  were  to  levy  and  collect  taxes,  to  direct  provincial 
public  works,  and  supervise  the  administration  of  the 
municipalities. 

The  First  Commission  and  Present  Powers  of  the  Gov- 
ernor General. — Perhaps  the  weakest  link  in  the  commis- 
sion form  of  government  in  the  Philippines  was  the  Com- 
mission itself.  Possessed  of  little  discretionary  power,  and 
influenced  largely  by  politics  at  home,  and  entirely  relying 
upon  Congress  for  the  direction  of  its  policies,  the  Commis- 
sion was  little  respected  by  the  provincial  or  municipal 
officials,  who  realized  that  Congress  had  the  final  authority. 

The  changes  which  have  taken  place  in  the  fonn  of  the 
Philippine  Government  since  1903  have  gradually  evolved 
a  Government  very  nearly  independent  in  its  local  func- 
tions, and  only  held  to  the  home  Government  by  a  single 
tie,  the  authority  of  the  Governor  General.  The  policy  of 
the  Wilson  administration  has  been  consistently  one  of 
granting  the  fullest  measure  of  self-government  to  the 
Filipino  people,  and  in  his  report  for  1918  the  Governor 
General  went  so  far  as  to  express  his  belief  that  the  people 
had  established  the  stable  government  demanded  by  Con- 
gress, as  a  prerequisite  for  the  granting  of  their  independ- 
ence. This  Government  now  consists  of  a  Governor  Gen- 
eral and  Vice-Go vernor  General  appointed  by  the  Presi- 
dent.    Under  the  Governor  General  are  the  six  Depart- 


MODERN  GOVERNMENT  POLICIES 


175 


ments  of  the  Interior,  Public  Instruction,  Justice,  Finance, 
Agriculture  and  Natural  Resources,  and  Commerce  and 
Communications,  the  heads  of  which  form  a  Cabinet  corre- 
sponding in  its  functions  very  much  to  the  Cabinet  of  the 
United  States.  Besides  these  Departments  several  official 
organizations  have  been  formed  under  the  direction  of  the 
Governor  General.  Thus  during  the  war  the  Council  of 
Defense,  and  the  Council  of  State  performed  certain  duties 
in  connection  with  the  preservation  of  order,  while  the 
Philippine  National  Guard  has  been  of  great  service  in 
maintaining  order  during  the  withdrawal  of  the  regular 
American  Army  during  1918  for  service  in  Siberia.  Three 
Government  corporations,  the  Philippine  National  Bank, 
the  Manila  Railroad  Company,  and  the  National  Coal  Com- 
pany, are  under  the  direct  control  of  the  Governor  Gen- 
eral. 

Legislative  and  Judicial  Functions  of  the  Government 
— The  legislative  functions  of  the  Philippine  Government 
are  performed  by  a  House  and  Senate,  constituted  along  the 
lines  of  legislative  bodies  in  this  country.  Legislation 
passed  by  this  body  must  be  approved  by  the  Governor 
General  and,  in  certain  specified  cases,  proposed  laws  must 
receive  the  approval  of  the  President  of  the  United  States. 

The  judiciary  consists  of  a  Supreme  Court,  courts  of 
first  instance  and  justice  of  the  peace  courts,  who  are  all 
under  the  supervision  of  the  Department  of  Justice. 

The  Department  of  Mindanao  and  Sulu  is  under  a  sep- 
arate Governor,  and  maintains  a  special  position  in  the 
Philippine  Government  because  of  the  large  proportion  of 
non-Christian  and  uncivilized  tribes.  Comprising  one- 
third  of  the  area  of  the  archipelago,  and  seven  per  cent  of 
the  population,  this  Department  is  organized  in  such  a 
way  as  to  meet  the  peculiar  problems  which  the  large  pro- 
portion of  Mohammedan  and  pagan  peoples,  representing 
almost  ninety  per  cent  of  the  whole,  present. 


1 


|i 


i 


176 


TRADING  WITH  ASIA 


The  American  Policy  of  Education.— The  policy  of  the 
American  Government  has  been  based  upon  education. 
While  this  question  has  been  approached  from  the  point  of 
view  of  the  political  development  of  the  people,  it  has  been 
felt  that  with  the  establishment  of  a  complete  system  of 
education,  many  other  problems  would  also  be  solved.  The 
chief  difference  between  the  policy  of  the  American  Gov- 
ernment in  the  Philippines  and  the  Dutch  and  English 
Governments  in  India  is  that  while  we  are  seeking  to  pre- 
pare the  Filipinos  for  popular  self-government,  through 
primary  and  secondary  education  offered  freely  to  all,  up 
until  very  recently  the  Dutch  and  English  have  sought  to 
maintain  their  suzerainty  by  opposite  means.  Not  that 
education  of  the  natives  is  not  being  carried  on  in  the 
Dutch  and  English  colonies,  but  the  education  is  designed 
to  strengthen  the  natives'  ideas  of  dependence  and  solid- 
arity with  the  home  government,  rather  than  to  fit  them 
to  ultimately  govern  themselves.  The  desire  for  independ- 
ence has  existed  in  the  Filipinos  for  many  years,  but  it 
could  not  in  justice  to  them  be  granted  until  they  had  been 
properly  fitted  to  undertake  self-government. 

The  English  language  has  been  adopted  as  the  com- 
mon language  in  the  schools  and  has  been  taught  for  20 
years— first,  because  a  single  language  was  necessary  in 
order  to  develop  an  effective  public  opinion,  and,  secondly, 
because  English  is  the  language  of  Anglo-Saxon  freedom. 
One-fifth  of  the  total  revenue  of  the  Islands,  or  about  $3,- 
000,000,  is  expended  on  public  education.  The  average 
daily  attendance  at  public  schools  in  the  Philippines  in 
1918  was  521,377,  in  a  total  of  4,747  schools. 

Other  Developments  under  American  Rule.— But  aside 
from  education,  great  attention  has  been  given  to  public 
health  and  modem  sanitary  methods,  and  the  use  of  pre- 
ventative measures,  such  as  vaccination,  have  greatly  re- 
duced disease  and  prevented  epidemics.    Scientific  aasist- 


MODERN  GOVERNMENT  POLICIES 


177 


ance  in  crop  growing  has  been  established  under  the  De- 
partment of  Agriculture  and  Natural  Resources,  and  the 
total  value  of  the  six  leading  crops,  rice,  abaca,  sugar,  co- 
conuts, corn,  and  tobacco,  totaled  in  1918  $175,000,000,  an 
increase  of  $54,000,000  over  1917,  and  of  $91,000,000  over 
1913.  The  Department  of  Commerce  and  Communica- 
tions was  increased  in  its  importance  in  January,  1918,  by 
the  creation  of  a  Bureau  of  Commerce  and  Industry,  which 
is  to  pay  especial  attention  to  port  development,  establish- 
ment of  radio  stations,  pfroper  distribution  of  labor  between 
the  Islands,  and  the  development  of  foreign  trade  by  the 
establishment  of  agencies  abroad.  Under  the  same  Depart- 
ment, the  Bureau  of  Public  Works  has  built  first-class  roads 
in  all  Provinces,  and  the  road  systems  of  each  province  have 
been  consolidated.  New  bridges  and  new  piers  at  Manila, 
Cebu,  Toeloban,  Iloilo,  and  elsewhere  have  been  begun. 

The  industrial  and  commercial  development  of  the 
Islands  has  received  a  great  impetus  by  the  war,  when  de- 
mands for  coconut  oil  have  far  exceeded  the  supply.  The 
result  has  been  an  influx  of  capital  into  the  Islands  which 
is  being  employed  to  develop  coal,  and  mineral  and  agri- 
cultural enterprises,  on  a  scale  never  before  attempted. 
The  capacity  of  the  Filipinos  to  carry  out  these  projects 
proves  that  the  policy  of  the  United  States  in  furnishing  a 
groundwork  of  education  has  not  been  without  results. 

Questions 

L  Describe  the  functions  of  the  three  branches  of  the  Dutch 
East  Indies  Government,  and  discuss  disadvantages  of  the 
system. 

2.  Why  is  it  difficult  to  control  labor  in  the  tropics  t 

3.  What  are  the  contributory  causes  of  credit  bondage? 

4.  How  is  land  now  held  by  foreigners  in  the  Dutch  East  Indies? 

5.  What  was  the  "net  profit  system"  in  the  sugar  culture? 

6.  What  led  Aguinaldo  to  assume  that  an  independent  govern- 

ment in  the  PhiUppines  would  be  recognized  by  the  United 
States? 


178 


TRADING  WITH  ASIA 


II 


7.  What  were  the  avowed  objects  of  the  American  Government  as 

set  forth  in  the  proclamation  of  the  Philippine  Commission! 

8.  Describe  the  organization  of  government  under  the  Philippine 

Commission  in  the  Philippines. 

9.  Describe  the  present  Government. 

10.  Outline  American  policy  in  the  Philippines. 


* 


CHAPTER  XI 

THE  TOPOGRAPHY,  AGRICULTURE,  AND  INDUSTRIES  OP  THE 

PHILIPPINES 

Seven-eighths  of  the  10,000,000  people  in  the  Philippines 
are  known  as  Filipinos.  The  balance  are  primitive  and 
semi-civilized  tribes  among  whom  are  the  Negritos,  the 
Subanuns,  the  Igorots,  Bontoks,  and  Ifugaos.  The  wants 
of  these  tribes  are  as  primitive  as  their  civilization,  and 
their  place  in  the  economic  structure  of  the  Islands  is  a 
comparatively  insignificant  one. 

Rice. — Rice  and  fish  or  corn  and  fish  furnish  the  princi- 
pal food  for  the  inhabitants  of  every  part  of  the  Islands, 
although  vegetables  form  a  large  part  of  the  diet  of  those 
people  living  far  from  the  coast.  Rice  is  the  chief  food- 
stuff and  consequently  the  main  crop.  As  a  dry  crop,  rice 
is  grown  in  the  mountain  regions,  but  the  greatest  part  of 
the  crop  is  raised  in  the  lowlands  in  paddy  fields  and  on 
terraced  slopes  leading  down  to  the  valleys.  In  some  parts, 
particularly  the  eastern  and  northeastern  slopes  of  some 
islands,  there  is  a  continuous  rainfall  and  the  season  is 
indefinite.  In  other  central  and  western  sections  of  these 
islands  there  is  a  dry  season  requiring  irrigation  for  rice 
culture,  and,  as  such  regions  comprise  the  chief  rice  regions 
and  irrigation  is  not  much  practiced  because  of  the  scarcity 
of  storable  water,  there  is  generally  but  one  crop  of  rice 
a  year.  This  is  planted  and  cultivated  in  the  rainy  season 
from  June  to  December  and  harvested  from  then  until 
February.  The  domestic  production  of  rice  is  about  530,- 
000  metric  tons,  while  150,000  long  tons  are  imported. 
Since  1877  the  Philippines  have  been  dependent  upon  im- 

179 


» 


180 


TRADING  WITH  ASIA 


ported  rice  in  an  ever  increasing  ratio.    Various  reasons 
are  assigned  for  the  lack  of  rice  production.    In  the  Philip, 
pmes  the  use  of  the  carabao,  or  water  buffalo,  is  considered 
essential  to  the  cultivation  of  rice,  and  when  many  of  these 
were  killed  off  by  the  rinderpest  the  production  of  rice 
fell  off  correspondingly.    With  the  increased  demand  for 
the  money  crops  for  export,  the  tendency  has  also  been  to 
dispense  with  the  disagreeable  and  unprofitable  task  of  rice 
raising  and  importations  have  increased.    The  growing  de- 
pendence of  the  Philippines  upon  outside  food,  however,  is 
a  state  of  affairs  which  is  liable  to  become  very  disastrous  in 
the  event  of  crop  failures  in  those  countries  which  form 
the  basis  of  supply.    Numerous  remedies  for  this  situation 
Aave  been  suggested,  including  an  increase  in  the  number 
of  work  animals,  reduction  of  production  costs  in  order  to 
yield  a  greater  profit,  the  abolition  of  the  share  system  of 
harvesting   in   favor   of   a  wage   system,   thereby   giving 
greater  profit  to  the  grower,  and  better  methods  of  cultiva- 
tion, including  the  use  of  modem  agricultural  machinery. 
Other  considerations  might  be  enumerated  as  better  seed 
selection,  better  irrigation,  and  the  bringing  of  more  virgin 
soil  under  cultivation. 

Corn.— The  status  of  corn  as  a  food  crop  in  the  Philip- 
pines is  a  low  one,  as  it  is  known  as  ''poor  man's  rice,"  and 
the  value  of  the  crop  is  one-eighth  that  of  the  rice  crop. 
Many  localities  are  admirably  adapted  to  the  cultivation  of 
com,  and  as  one-fifth  of  the  population  resides  in  these 
districts  it  has  become  the  principal  food  of  a  large  portion 
of  the  population.  Cora  cultivation  and  storage  are  both 
in  a  cmde  state.  The  soil  preparation  is  poor,  there  is  no 
seed  selection,  the  distance  between  the  stalks  is  too  small, 
and  fertilizers  are  not  sufficiently  used.  The  methods  of 
storing  employed  are  either  by  fastening  the  whole  ear  to 
a  framework,  tying  the  ears  together  and  drying  on  the 
roof  of  the  house  or  by  shelling  and  storing  for  a  short 


INDUSTRIES  OF  THE  PHILIPPINES 


181 


time.  The  efforts  to  increase  production  have  been  largely 
along  the  lines  of  remedying  the  defects  in  cultivation  out- 
lined above  and  in  the  introduction  of  modem  steel  com 
mills  to  replace  the  crude  stone  mills. 

Other  Food  Crops. — There  are  several  other  crops  which 
serve  to  supplement  the  rice  and  maize  crops  of  the  Islands 
as  food  crops.  The  sweet  potato  is  cultivated  in  certain 
sections  where  the  soil  is  not  suitable  for  rice  and  the  high 
winds  do  not  permit  maize  to  grow.  Generally  the  sweet 
potato  is  the  food  of  the  very  poor  classes.  Numerous 
species  of  yams  also  grow  wild  and  are  cultivated.  Sweet 
potatoes  also  figure  as  an  important  catch  crop  before  and 
after  rice  planting.  The  taro  root  is  a  starch  food  of  sec- 
ondary value  which  is  grown  principally  along  streams  and 
in  other  localities  where  the  necessary  water  is  obtainable 
during  the  dry  season.  Cassava  root,  from  which  we 
make  tapioca,  is  the  chief  food  crop  in  the  Sulu  Archipel- 
ago. Among  the  fruits  produced  mangos  and  mandarins 
are  the  most  generally  used.  The  demand  for  bananas  is 
greater  than  the  supply,  and  while  they  are  a  main  article 
of  diet  in  the  rural  districts,  being  grown  in  many  gardens, 
the  best  species  are  also  in  great  demand  by  the  better 
classes  and  bring  high  prices  in  the  cities.  Intelligent 
work  has  been  done  in  introducing  a  large  variety  of  pulse 
and  vegetables  into  the  Philippine  dietary.  Cowpeas,  lima 
beans,  and  green  gram  furnish  the  necessary  protein  to  the 
Filipino,  and  other  varieties,  including  soya  beans  are 
being  introduced.  Efforts  are  being  made  to  educate  the 
people  to  use  more  vegetables. 

Hemp. — The  principal  export  crop  is  abaca,  or  hemp, 
which  was  grown  in  the  Islands  before  the  coming  of  the 
white  man.  In  1919  132,000  long  tons  were  exported,  70,- 
000  tons  to  the  United  States,  47,000  tons  to  Great  Britain, 
9,000  tons  to  Japan,  and  the  rest  to  other  countries.  Hemp 
is  free  from  attack  by  pests  and  fungous  diseases,  resists 


182 


TRADING  WITH  ASIA 


drought,  and  may  be  cultivated  without  much  labor  at  all 
times  of  the  year.     Early  in  the  nineteenth  century  the 
cultivation  of  the  wild  plant  was  begun,  and  to-day  the  pro- 
duction consists  principally  of  the  cultivated  plant,  al- 
though some  uncultivated  varieties  are  still  produced.     In 
the  older  districts  the  holdings  are  very  small  due  to  the 
scarcity  and  immobility  of  labor.    Hemp  buyers,  through 
advances  on  the  crop,  usually  gain  control  of  the  crop, 
although  in  the  newer  districts  larger  plantations  are  grow- 
ing up  which  are  largely  independent.    As  most  of  the  fiber 
must  be  stripped  by  hand,  the  necessary  labor  for  this  oper- 
ation is  difficult  to  obtain  and  often  demands,  as  wages,  a 
share  in  the  product.     The  hemp  stripper  is  usually  not  a 
farmer,  but  when  the  price  of  hemp  falls,  tliere  is  gen- 
erally an  exodus  of  strippers  from  the  hemp  fields  to  the 
rice  fields  where  they  engage  in  harvesting  the  rice.    The 
question  of  transportation  of  the  hemp  from  the  hill  fields 
to  the  coast  is  a  serious  one,  and  the  market  price  of  the 
product  usually  determines  whether  much  of  th(^  hemp  shall 
not  be  left  to  waste  on  the  stalk  rather  than  be  transported 
to  the  coast  by  the  costly  labor  of  man  and  beast.    Care- 
lessness in  drying  and  delay  in  drying  and  stripping  are 
the  principal  causes  of  low  quality  hemp  production,  which 
has  shown  a  steady  tendency  to  increase  in  recent  years. 
This  tendency  has  been  heightened  by  the  fact  that  the 
local  hemp  buyers  maintain  a  discrepancy  in  prices  in 
favor  of  lower  grades,  twice  as  much  of  which  can  be  pro- 
duced in  an  hour  as  of  the  high  grade,  at  only  something 
like  a  25  per  cent  reduction  in  price.     This  is  due,  of 
course,  to  the  high  cost  of  labor  in  the  stripping  process 
which  absorbs  half  the  value  of  the  product.    Most  of  the 
high-grade  fiber  is  produced  by  growers  who  are  independ- 
ent of  the  local  buyers  and  who  sell  directly  to  Manila. 
The  local  buyers  are  seldom  expert  judges  of  quality  and 
prefer  to  buy  low-grade  hemp,  not  being  such  good  judges 


INDUSTRIES  OF  THE  PHILIPPINES 


183 


r  li 


h' 


of  the  quality  of  the  high-grade  product.  Moreover,  such 
buyers  make  their  commission  at  so  much  per  picul  (133 
pounds)  and  their  gains  are  greater  if  they  buy  more 
piculs  of  low-grade  hemp  than  less  piculs  of  high-grade 
hemp. 

There  are  three  distinct  problems  facing  the  hemp  indus- 
try in  the  Philippines:  (1)  to  raise  the  quality  of  the 
product;  (2)  to  increase  the  size  of  the  holdings  and  to 
decrease  the  number  of  middlemen  handling  the  fiber ;  and 
(3)  the  greater  use  of  machinery  in  stripping. 

In  a  sense  the  two  last  problems  are  contributory  to  the 
first,  for  until  the  high  cost  of  hand  stripping  is  eliminated 
the  tendency  to  produce  low-grade  hemp  will  continue  to 
exist,  and  with  many  small  holdings,  whose  product  is  con- 
trolled by  local  buyers,  the  possibility  of  relief  from  price 
discrepancy  in  favor  of  the  low-grade  product  is  remote. 

Like  all  export  crops,  the  state  of  the  hemp  market  is  de- 
termined by  factors  entirely  removed  from  domestic  con- 
siderations, and  the  fall  and  rise  of  the  price  due  to  foreign 
demand,  influences  directly  the  production  and  the  attrac- 
tion of  labor  to  hemp  raising  and  stripping.  Good  crops 
in  the  United  States,  causing  a  brisk  demand  for  binder 
twine,  react  immediately  upon  the  price  of  hemp  and  its 
production  in  the  Philippines. 

Copra. — The  Philippines  produce  about  one  quarter  of 
the  world's  coconuts,  and  while  the  export  of  the  dried 
coconut  meat,  or  copra,  practically  all  of  which  went  to 
the  United  States,  dropped  from  103,000  long  tons  in  1918 
to  14,000  long  tons  in  1919,  the  export  of  coconut  oil  in- 
creased in  the  same  years  from  71,000  long  tons  to  128,000 
long  tons,  120,000  of  which  went  to  the  United  States. 
Coconut  trees  are  grown  in  two  ways,  in  large  groves 
owned  by  landholders  and  in  small  patches  around  the 
homes  of  small  farmers.  Pests,  including  insects,  mam- 
mals, birds,  and  diseases  which  infect  the  trees,  destroy  a 


•I 


184 


TRADING  WITH  ASIA 


great  deal  of  the  product  annually,  and  the  most  harmful 
of  these  is  the  rhinoceros  beetle  which  attacks  the  bud  in 
the  palm,  although  the  red  weevil,  which  bores  into  the 
trunk,  destroys  a  great  deal.     These  insects  breed  in  rub- 
bish consisting  of  old  leaves  and  husks  which  accumulate 
around  the  bases  of  the  trees,  and,  for  this  reason,  the  best 
results  are  obtained  from  groves  that  are  kept  free  from  this 
rubbish.     The  wild  pig  roots  up  the  seedlings  in  many  places 
and  can  be  kept  away  only  by  strong  fences.     But  larger 
losses  in  production  are  suffered  from  poor  harvesting  and 
drying.     The  fear  of  thieves  stealing  the  ripened  fruit,  the 
need  of  ready  money,  and  the  tendency  to  gather  all  the 
nuts  in  a  cluster,  whether  they  are  ripe  or  not,  cause  green 
nuts  to  be  harvested  at  a  consequent  loss  in  quality.     Copra 
is  cured  either  by  sun  drying  or  smoking.     The  product 
of  the  drying  process  is  suitable  for  food,  but  the  product 
of  the  smoking  process  contains  creosote,  which  limits  its 
use  only  to  the  manufacture  of  soaps,  candles,  etc.    Due 
to  crude  drying  methods,  10  to  15  per  cent  of  water  is  left 
in  the  copra  when  shipped,  which  often  causes  it  to  mold 
and  deteriorate.     In  order  to  avoid  this,  the  introduction 
of  mechanical  driers  which  evaporate  the  moisture  by  hot 
air  is  being  urged. 

For  the  reasons  outlined  above  the  low  quality  of  the 
Philippine  copra  causes  it  to  command  the  lowest  price  in 
the  market.  Local  buyers,  by  advancing  money  on  crops, 
also  thwart  any  incentive  to  produce  better  copra. 

Sugar. — The  Philippines  became  prominent  as  a  sugar 
producing  country  about  1869  when  the  opening  of  the 
Suez  Canal  and  the  great  demand  and  high  price  of  sugar 
during  the  Crimean  war  made  it  an  important  source  of 
supply.  A  British  central  was  established  in  1877,  but  closed 
in  1880  as  unprofitable.  In  1893  the  production  was  300,- 
000  tons,  of  which  261,000  tons  were  exported.  The  Island 
of  Negros  was  the  leading  producer.    After  peace  was  re- 


y 


I 


INDUSTRIES  OF  THE  PHILIPPINES 


185 


stored  in  1899  the  Philippine  sugar  production  was  reduced 
to  almost  nothing.  Since  then  failure  to  adopt  modern 
methods  has  held  the  production  below  the  1893  figures, 
which  have  only  been  equalled  during  the  past  few  years. 
The  exports  for  1918  were  225,000  long  tons  and  in  1919, 
236,000  long  tons.  The  principal  markets  are  the  United 
States,  which  take  91,000  long  tons ;  Hongkong,  66,000  long 
tons ;  China,  40,000  long  tons ;  Japan,  35,000  long  tons ;  and 
other  countries,  4,000  long  tons.  A  very  recent  move  has 
been  made  to  replace  the  antiquated  methods  employed  in 
sugar  milling  by  modem  centrals  at  a  consequently  lower 
cost  of  production,  and  it  is  hoped  that  Philippine  sugar 
will  gain  a  preeminent  place  in  the  world's  market. 

Tobacco.— In  1919  the  Philippines  exported  397,000,000 
cigars,  276,000,000  of  which  went  to  the  United  States, 
34,000,000  to  China,  8,000,000  to  Australia,  8,000,000  to 
Hongkong,  and  71,000,000  to  other  countries.  In  the  same 
year  48,000,000  pounds  of  unmanufactured  tobacco  were 
exported,  22,000,000  pounds  of  which  went  to  Spain,  9,000,- 
000  pounds  to  France,  3,000,000  pounds  to  the  United 
States,  and  14,000,000  pounds  to  other  countries.  In  ad- 
dition to  these  exports  there  is  a  large  domestic  consump- 
tion of  locally  grown  leaf  and  Manila  made  cigarettes. 
The  aim  of  tobacco  growers  is  to  produce  a  sufficient  quan- 
tity of  higher  grade  leaf  for  the  increasing  demand  for 
Philippine  cigars  in  the  United  States.  This  requires  the 
training  of  more  cigar  makers  at  Manila.  The  chief  causes 
of  low  grade  tobacco  production  is  the  lack  of  supervision 
over  the  small  growers  who  produce  the  bulk  of  the  to- 
bacco and  are  ignorant  of  the  proper  culture  and  curing 
methods.  These  small  growers  sell  to  the  factory  agents 
through  local  buyers.  Just  as  in  the  hemp  trade,  these 
buyers  are  ignorant  of  quality  and  offer  the  same  price  for 
all  grades  of  tobacco  with  the  result  that  there  is  no  in- 
centive for  the  small  growers  to  cultivate  the  high-grade 


186 


TRADING  WITH  ASIA 


I 


'111 

ill 


leaf.  Moreover,  the  small  growers  are  often  at  the  mercy 
of  the  buyers  who  lend  them  money  on  their  crops  and 
compel  them  to  turn  over  their  product  at  a  very  low 
price.  The  Government  is  now  attempting  to  improve 
these  conditions  by  instruction  and  example  through  ex- 
perimental stations. 

Fibers. — Maguey  fiber,  obtained  from  the  agave  cantala, 
was  introduced  into  the  Philippines  from  Mexico  where 
henequin  and  sisaZ  had  long  been  grown.  This  plant 
thrives  on  poor  soils,  and  is  consequently  raised  in  Ilocos, 
Norte,  Cebu,  and  Bohol,  where  other  crops  could  not  be 
made  to  pay.  The  production  is  still  small  and  only  9,000 
tons  were  exported  in  1919. 

Kapok  trees  grow  in  some  abundance,  but  the  gather- 
ing of  the  fiber  has  not  reached  the  importance  it  has  in 
Java.  One  or  two  plantations  exist,  but  most  of  the  trees 
grow  along  the  roads  and  their  fiber  is  lost.  Only  100 
tons  are  exported. 

Other  Possible  Crops. — ^Among  other  minor  and  possible 
crops  are  fruits,  and  rubber,  the  cultivation  of  which  is 
handicapped  by  the  2,500  acre  limitation  in  the  land  laws; 
silk,  for  which  a  plentiful  supply  of  labor  is  lacking;  es- 
sential oils,  particularly  for  perfumery  and  coffee,  which 
has  never  recovered  from  the  1889  pest,  and  does  not  yield 
the  certain  returns  of  copra  and  other  crops. 

Animal  Industry. — The  Philippines  furnish  an  excellent 
grazing  country  in  over  40  per  cent  of  the  area.  The 
carabao  is  indigenous  to  the  Philippines,  while  cattle, 
horses,  and  goats  were  introduced  by  the  Spaniards  from 
Mexico,  China,  and  Spain.  Since  1888  the  rinderpest, 
surra,  and  internal  strife  have  reduced  the  number,  of  ani- 
mals' until  they  no  longer  nearly  fulfill  the  agricultural 
needs  of  the  community.  The  carabao  does  90  per  cent  of 
the  agricultural  work  and  transportation  in  the  Philip- 
pines, and,  being  by  nature  fitted  to  work  in  the  muddy 


INDUSTRIES  OF  THE  PHILIPPINES 


187 


rice  fields,  it  is  preferred  to  other  animals  by  the  natives. 
The  cattle  of  the  Philippines  have  been  greatly  reduced  in 
number  by  disease,  and  due  to  the  lack  of  cross  breeding 
for  many  years  their  type  has  deteriorated.  Recently  an 
Indian  breed  has  been  introduced  which  is  peculiarly  im- 
mune from  rinderpest  and  tick.  Many  domestic  cattle  are 
killed  for  meat.  There  are  few  milch  cows,  as  little  milk 
is  used  by  the  natives.  The  Philippine  horse,  *by  a  process 
of  natural  selection,  has  developed  from  a  cross  of  the 
Sulu  horse  and  those  from  Mexico  and  China  into  a  type 
best  suited  for  the  climate  and  the  riding  and  light  hauling 
for  which  it  is  almost  exclusively  used.  Due  to  careless 
breeding  the  stock  has  deteriorated,  and  in  order  to  provide 
the  necessary  work  animals  scientific  breeding  and  im- 
provement is  proposed.  Swine  raising  is  carried  on  to 
some  extent  in  all  parts  of  the  Islands,  but  the  total  number 
of  swine  is  not  large.  The  swine  are  permitted  to  run 
loose  and  are  only  penned  up  shortly  before  killing  in  order 
to  fatten  them.  Much  of  the  meat  supply  is  pork,  which  is 
found  in  practically  all  local  markets.  Poultry  is  almost 
as  plentiful  as  pork,  but  the  laying  qualities  are  affected 
by  the  tendency  to  breed  for  cockfight ing,  which  results  in 
a  high  mortality  among  the  males,  and  a  small,  tough  type 
of  chicken.  About  4,000,000  eggs  are  imported  annually 
from  China. 

Fisheries. — The  catch  from  in-shore  fishing,  conducted 
mainly  at  night,  is  the  principal  source  of  food  for  a  large 
proportion  of  the  inhabitants,  fish  being  prc^lific  in  the 
shallow  waters  of  many  of  the  Islands.  In  some  sections 
80  per  cent  of  the  population  derive  their  livelihood  from 
fishing.  Many  people  move  to  the  good  fishing  grounds 
during  the  seasons  when  fish  are  plentiful,  drying  the 
catch  and  shipping  it  inland.  The  dragnet  is  the  most 
widely  used  method  of  fishing,  and  the  work  is  often  car- 
ried on  by  the  share  system.    Usually  the  owner  of  the 


188 


TRADING  WITH  ASIA 


boat,  nets,  and  traps  receives  one-half  of  the  catch  and  the 
rest  is  divided  among  the  fishermen.  Fish  culture  is  car- 
ried  on  near  Manila  and  Iloilo. 

Forestry.— About  half  the  total  area  of  the  Islands  ig 
covered  with  forests  and  about  one-third  of  the  total  area 
axe  virgin  forests.  The  principal  forest  production  con- 
sists  of  the  lumber  of  the  lauan,  apitong,  and  i/acals  trees, 
which  is  used  for  construction  rather  than  the  finer  furni- 
ture woodsr  which  are  only  found  at  occasional  places  in 
the  forests.  Strict  Government  regulations  to  prevent  de- 
forestation have  been  made,  although  the  difficulty  of 
enforcing  regulations  which  conflict  with  the  Kaingin  sys- 
tem of  clearings  for  agricultural  purposes  is  very  great. 

Three  improvements  are  necessary  in  the  actual  prepara- 
tion of  the  lumber  for  market:  (1)  the  reduction  of  the 
number  of  licenses,  the  putting  the  logging  operations  on 
a  large  scale  basis,  and  the  avoidance  of  the  waste  now 
caused  by  crude  methods  and  equipment;  (2)  the  reduction 
of  high  milling  costs  by  better  equipment  more  scientifi- 
cally arranged  and  the  elimination  of  waste;  (3)  a  decrease 
in  transportation  costs  through  better  shipping  facilities. 

There  is  still  a  good  demand  for  Philippine  lumber  in  the 
domestic  market,  and,  after  that  is  supplied,  in  China  and 
the  United  States. 

Manufacturing  Industries.— As  a  rule  manufacturing 
may  be  said  to  be  in  the  household  stage  of  development. 
Hats,  mats,  bamboo  and  rattan  chairs,  baskets,  pottery, 
rope,  embroidery,  and  knotted  ahaca  are  all  made  in  the 
households  and  sold  to  commission  men  for  export.  In 
addition  to  these  articles  many  articles  for  domestic  use  are 
manufactured  in  the  households.  The  Islands  have  not  yet 
reached  the  stage  of  development  where  large-scale,  or  fac- 
tory, industry  can  be  successfully  undertaken,  and  as  long 
as  the  agricultural  industries  remain  undeveloped  for  lack 
of  population  there  will  be  no  incentive  for  the  agricul- 


r.    11 


INDUSTRIES  OF  THE  PHILIPPINES 


189 


turist  to  abandon  the  independent  life  of  the  farm  for  the 
circumscribed  existence  of  the  factory. 

Questions 

1.  Discuss  the   rice    crop   of  the  Philippines   and   enumerate 

remedies  for  low  production. 

2.  What  part  does  maize  play  in  the  agricultural  economy  of 

the  Islands? 

3.  Discuss  three  other  food  crops. 

4.  What  factors  tend  to  keep  the  quality  of  the  hemp  produced 

low? 
6.  What  are  some  suggested  improvements  in  copra  harvesting 
and  drying? 

6.  Discuss  the  sugar  production  of  the  Philippines. 

7.  What  is  the  aim  of  Philippine  tobacco  growers  and   how 

may  it  be  carried  out? 

8.  What  are  the  principal  animals  of  the  Philippines  and  how 

is  each  used? 

9.  In  what  three  ways  may  the  lumber  industry  be  improved? 
10.  Discuss  manufacturing  industries. 


I) 

ft 

I, 


CHAPTER  XII 

TOPOGRAPHT,  AGRICULTURE,  MINES,  AND  INDUSTRIES  OF  THE  DUTCH 

EAST  INDIES 

The  area  of  the  Dutch  East  Indies  is  about  736,400 
square  miles,  which  includes  the  Islands  of  Java,  Sumatra, 
part  of  Borneo,  Celebes,  Dutch  or  Western  New  Guinea, 
and  a  great  many  smaller  islands,  the  Archipelago  extend- 
ing over  3,000  miles  east  and  west  and  1,100  north  and 
south.     The  population  is  47,000,000,  33,000,000  of  which 
are  concentrated  on  the  Island  of  Java.    Included  in  this 
figure  are  138,000  Europeans,  832,000  Asiatics,  including  91 
per  cent  Chinese,  5  per  cent  Arabs,  and  4  per  cent  other  Asi- 
atics.    The  density  of  population  is  64  to.  the  square  mile 
for  the  Archipelago,  although  675  people  inhabit  a  square 
mile  in  Java  and  only  seven  in  Borneo.     The  large  number 
of  Chinese  in  the  Dutch  East  Indies  are  employed  as  la- 
borers, small  farmers,  and  merchants.     The  Chinese  mer- 
chant is  the  most  important  factor  in  the  retail  business 
of  the  Islands.    With  few  exceptions,  the  European  or 
Dutch  residents  are  mostly  officials  and  large  importers. 

Trade  Areas  of  the  Dutch  East  Indies,  Java  and 
Madoera. — For  administrative  purposes  the  islands  are  di- 
vided into  an  area  embracing  the  Islands  of  Java  and 
Madoera,  and  another  area  embracing  the  Outer  Posses- 
sions, or  all  other  islands.  There  are  four  trade  regions  in 
the  first  area ;  that  of  East  Java,  based  on  the  port  of  'Soera- 
baya,  includes  the  eastern  portion  of  Java,  the  Islands  of 
Bali,  Lombok  adjacent,  and  the  southern  part  of  southeast 
Borneo;  that  of  East  Central  Java,  based  on  the  port  of 
Samarang,  includes  the  area  that  its  name  indicates;  that 

190 


INDUSTRIES  OF  THE  DUTCH  EAST  INDIES      191 

of  West  Central  Java,  based  on  the  port  of  Cheribon; 
and  that  of  West  Java  based  on  the  port  of  Batavia  (also 
known  as  Tandjoeng  Priok)  includes  west  Java,  southern 
Sumatra,  and  the  Islands  of  Banka  and  Billiton. 

The  Outer  Possessions. — There  are  likewise  four  trade 
regions  in  the  Outer  Possessions ;  the  Eastern  Archipelago, 
based  on  the  port  of  Macassar,  includes  the  Celebes,  Men- 
ado,  the  eastern  part  of  southeast  Borneo,  Ambonia,  the 
northern  Moluccas,  Dutch  New  Guinea,  and  Timon;  the 
Padang  region  includes  Sumatra  West  Coast,  and  Ban- 
koelen;  the  Medan  region  includes  Sumatra  East  Coast; 
while  Singapore  region  includes  northern  Sumatra,  and 
western  Borneo. 

Java's  total  export  trade  averages  normally  about  $140,- 
000,000,  although  during  1915,  1916,  and  1917,  due  to  the 
abnormally  high  prices  obtained  for  products  abroad  and 
the  increased  productions  incidental  to  the  war,  the  export 
trade  of  the  Java  and  Madoera  area  averaged  $176,000,000 
for  1915,  $207,000,000  for  1916,  and  $180,000,000  for  1917. 
By  1918  the  normal  pre-war  figure  of  $140,000,000  had 
been  reached,  although  due  to  high  prices  and  the  disloca- 
tion of  shipping  this  value  represented  about  half  the  ton- 
nage shipped  out  in  1914.  The  principal  items  are  sugar, 
rubber,  tin,  petroleum,  tea,  coffee,  tobacco,  copra  and  co- 
conut oil,  fibers,  cinchona,  pepper,  and  tapioca.  The  ex- 
port trade  of  the  Outer  Possessions  may  be  divided  in  the 
following  way.  For  the  Eastern  Archipelago:  $3,000,000 
for  Celebes,  nearly  half  of  which  is  for  copra,  although 
damar,  coconut  oil,  birds'  skins,  and  rattan  are  impor- 
tant ;  and  $2,500,000  for  Menado,  of  which  90  per  cent  is 
for  copra.  For  the  Sumatra  West  Coast  the  direct  exports 
are  negligible,  most  of  the  goods  going  out  by  way  of  Ba- 
tavia. The  Sumatra  East  Coast  exports  $40,000,000  worth 
of  products  annually,  the  principal  ones  being  petroleum, 
valued  at  $14,000,000;  rubber,  $13,000,000;  tobacco,  $10,- 


192 


TRADING  WITH  ASIA 


000,000;   tea,   $400,000;   gambler,   $400,000;   and  others 
$2,200,000. 

It  is  estimated  that  $93,000,000  are  invested  in  Sumatra 
East  Coast  estates,  of  which  $36,000,000  is  Dutch ;  $29,000,- 
000,  British;  $10,000,000,  American;  $7,000,000,  Belgian; 
and  all  others,  $10,000,000. 

The  exports  from  the  Singapore  trade  region  total  $30,- 
000,000  annually,  consisting  principally  of  mineral  oils, 
rubber,  copra,  gambler,  rattan,  sago,  guttas,  hardwoods, 
fish,  damar,  and  hides. 

Agriculture.— In   1830   the    Dutch   Government   intro- 
duced the  culture  system,  which,  as  has  been  stated,  was 
based  on  the  claim  of  the  Dutch  to  the  ownership  of  the  land, 
the  natives  being  compelled  either  to  part  with  a  certain  por- 
tion of  their  crops  or  pay  a  certain  sum  as  ground  rent.    An 
attempt  was  made  to  induce  the  natives  to  plant  a  fifth  of 
their  land  with  products  for  European  consumption,  which 
would  not  enter  into  the  native  scheme  of  life,  such  as 
sugar,  coffee,  tea,  rubber,  tobacco,  fibers,  etc.    The  prod- 
ucts then  became  the  property  of  the  Government,  and 
when  the  ground  rent  was  deducted  from  their  value  the 
difference  was  returned  to  the  natives.    The  system  had  its 
merits,  but  was  found  to  weigh  heavily  on  the  natives  as 
the  European  population  increased,  and  proved  a  growing 
obstacle  to  individual  enterprise.    Since  the  abolition  of 
this  system  in  1870,  the  production  of  the  Islands  has  in- 
creased many  fold,  and  though  the  machinery  through 
which  the  products  are  marketed  is  still  in  the  hands  of 
the  Dutch,  the  natives  are  constantly  raising  their  stand- 
ard of  living.     Reformed  land  laws,  which  do  not  permit 
the  alienation  of  native  owned  land  to  foreign  holders,  but 
merely    provide   for    their   lease    for    certain    stipulated 
periods,  have  also  tended  to  emphasize  this  development. 

Sugar.— One  million  five  hundred  thousand  tons  of  sugar 
are  produced  every  year  in  the  Dutch  East  Indies,  and  due 


I 


r 


INDUSTRIES  OF  THE  DUTCH  EAST  INDIES     193 

to  the  incessant  scientific  research  of  the  Dutch  Government 
improved  methods  of  cultivation  are  constantly  increasing 
the  yield  per  acre.  This  is  also  being  increased  by  the  use 
of  artificial  fertilizers,  and  improved  facilities  for  manufac- 
turing the  sugar  cane.  The  total  value  of  the  sugar  export 
amounts  to  $75,000,000. 

The  distribution  of  sugar  centrals  and  exports  for  the 
various  trade  regions  is  East  Java,  102  centrals,  666,000 
metric  tons;  East  Central  Java,  85  centrals,  356,000  metric 
tons ;  West  Central  Java,  85  centrals,  146,000  metric  tons. 
These  three  regions  control  the  sugar  production  of  the 
Dutch  East  Indies. 

Rubber.— There  are  to-day  about  700  estates  in  the 
Dutch  East  Indies  producing  rubber.  The  rubber  plant 
has  been  artificially  grown  for-  30  years,  the  species  thus 
produced  being  known  as  Para  rubber,  and  was  introduced 
from  Brazil,  although  the  culture  of  the  native  Java  rubber 
is  also  gaining  headway.  The  total  value  of  the  rubber 
exports  amount  to  $12,000,000  dollars  from  Java,  and 
$13,000,000  from  the  Sumatra  East  Coast.  The  principal 
rubber  region  is  West  Java,  and  the  port  is  Batavia.  The 
rubber  is  produced  in  the  lowlands  of  this  region,  and  tea 
is  grown  on  the  higher  lands. 

Tea. — The  mountainous  districts  of  Sumatra  are  also 
particularly  well  suited  to  the  cultivation  of  tea,  although 
the  largest  production  is  still  on  the  Island  of  Java.  Sys- 
tematic effort  to  increase  the  foreign  market  for  Java  tea 
has  resulted  in  a  very  large  sale,  particularly  in  this  coun- 
try. The  yearly  value  of  tea  exports  from  the  Dutch  East 
Indies  amounts  to  about  $6,600,000.  Tea  is  grown  on 
estates  as  in  India,  and  not  in  small  garden  patches  as  in 
China,  and  because  of  the  improved  methods  used  the  price 
and  quality  led  to  an  increased  sale  abroad. 

Coffee. — Java  coffee  is  probably  the  best  known  product 
of  the  Dutch  East  Indies  in  this  country.    The  culture  suf- 


^, 


194 


TRADING  WITH  ASIA 


fered  severely  some  years  ago  from  a  disease  and  pest,  but 
this  was  overcome  by  the  introduction  of  Robusta  and 
Liberian  coffees,  which  are  found  to  thrive  best  in  this  cli- 
mate. Annually  20,000  tons  of  coffee  are  produced,  and 
the  exports  total  $10,000,000,  which  are  largely  sent  to  the 
Netherlands,  France,  and  the  United  States. 

Tobacco. — Tobacco  was  introduced  under  the  culture 
system  with  disappointing  results,  but  after  the  abolition  of 
the  culture  system  the  natives  were  taught  the  proper 
method  of  cultivation,  and  the  production  is  now  increas- 
ing rapidly.  Sumatra  is  the  center  of  the  tobacco  growing 
district  of  the  Dutch  East  Indies,  and  the  Government  is 
giving  every  attention  to  teaching  and  advising  the  natives 
as  to  the  best  methods.  There  are  a  number  of  tobacco 
estates  under  European  management,  although  planting  is 
also  carried  on  largely  by  the  natives,  who  are  supported 
by  public  land  credit  banks.  The  export  totals  $10,000,- 
000  in  value,  and  is  sent  chiefly  to  Holland,  although  the 
domestic  consumption  is  increasing  with  the  introduction 
of  Western  civilization. 

Copra  and  Coconut  Oil.— Copra  was  one  of  the  few 
export  crops  which  was  not  introduced  by  the  culture  sys- 
tem, the  coconut  palm  being  indigenous  throughout  the 
Islands,  and  from  early  times  having  played  an  important 
part  in  the  native  economy.  With  the  increased  demand 
for  coconut  oil  for  use  in  the  manufacture  of  glycerine, 
oleomargarine,  soaps,  and  candles,  the  planting  of  coconut 
trees  has  been  encouraged  and  large  plantations  are  now 
devoted  to  this  culture ;  20  large,  modern  copra  p»ressing  oil 
mills,  with  modern  machinery,  furnish  a  profitable  outlet 
for  the  products  of  this  industry,  the  value  of  which  is  in- 
dicated by  the  exports,  which  total  $7,000,000  per  year  for 
copra  and  $7,000,000  for  oil.  The  principal  shipments  of 
copra  were:  from  Menado,  about  $2,000,000  worth;  from 
the  Celebes,  about  $1,200,000  worth;  from  Borneo,  about 


INDUSTRIES  OF  THE  DUTCH  EAST  INDIES      195 

$1,200,000  worth ;  and  from  all  other  islands  about  $2,000,- 
000  worth.  The  principal  copra-crushing  mills  are  in  the 
Soerabaya  district,  from  which  port  much  of  the  coconut 
oil  is  exported. 

Fibers.— The  principal  fiber  is  kapok,  the  cotton-like 
fiber  which  surrounds  the  seed  of  the  cotton  tree,  and  which 
is  in  great  demand  in  the  West  for  stuffing  pillows  and  in 
the  manufacture  of  life  preservers.  Sisal  and  hemp  are 
other  fibers  now  being  raised  in  West  Java  on  an  experi- 
mental scale.  The  total  value  of  fiber  exports  is  $5,000,000 
annually. 

Quinine  and  Cinchona. — Cinchona,  or  Peruvian  bark, 
from  which  quinine  is  made,  is  grown  in  the  high  plains  and 
hills  of  western  Java  where  tea  is  grown  and  it  is  shipped 
from  Batavia.  The  annual  export  of  quinine  amounts  to 
about  $5,000,000,  and  of  cinchona  $1,000,000. 

Pepper. — One  of  the  earliest  exports  from  the  Dutch 
East  Indies  was  pepper,  which,  with  other  spices,  was  used 
extensively  in  Mediaeval  Europe  for  the  preservation  of 
meats  and  other  foods  before  the  use  of  ice  and  of 
canning.  The  present  annual  export  of  pepper  is  valued 
at  $4,000,000. 

Tapioca. — The  root  of  the  cassava  plant,  which  is  exten- 
sively grown  in  Java,  is  manufactured  into  tapioca  prod- 
ucts for  the  Western  market.  The  exports  are  valued  at 
$2,000,000  annually. 

Rice.— Rice  is  the  staple  food  of  the  natives,  although 
the  best  quality  is  exported,  and  the  total  production  of  the 
lower  grades  is  not  sufficient  to  feed  the  whole  population, 
large  quantities  being  imported  from  Indo-China,  India, 
and  Siam.  Rice  is  produced  by  dry  and  wet  farming,  de- 
pending largely  upon  the  character  of  the  land.  Terraced 
paddy  fields  are  in  vogue,  such  as  are  used  in  the  Philip- 
pines and  Japan.  The  annual  production  is  about  7,000,- 
000  tons,  and  the  better  qualities  are  exported  to  the  value 


196 


TRADING  WITH  ASIA 


of  $2,000,000  annually.  Other  agricultural  products  in 
the  order  of  their  export  value  are  indigo,  peanuts,  cocoa, 
damar,  spices,  essential  oils,  gambler,  etc. 

Tin  Mining.— The  Government  tin  mines  on  the  Island 
of  Banka  are  the  most  important  mines  in  the  Dutch  East 
Indies,  producing  annually  15.000  tons  of  tin,  and  export- 
ing  to  the  value  of  $16,000,000.  The  mines  employ  21,000 
workmen.  The  ore  is  mined  exclusively  from  open  pits, 
which  are  in  the  alluvial  deposits  of  many  rivers,  and  in 
the  alluvial  strata  on  the  slopes  of  the  smaller  hills.  There 
are  no  underground  galleries,  the  work  being  carried  on 
entirely  near  the  surface.  The  laborers  are  chiefly  Chinese 
eoohes,  and  the  work  is  supervised  by  qualiSed  Dutch 
mining  engineers.  Other  tin  mines  are  the  Billiton  Com- 
pany's  mines  on  the  Island  of  Billiton,  which  have  an  an- 
ual  production  of  5,000  tons. 

Coal  Mining.— The  method  of  steam  navigation  in  the 
tropical  waters  of  the  Dutch  East  Indies  has  been  a  large 
factor  in  opening  up  the  coal  fields.  The  Ombilin  mines  on 
the  west  coast  of  the  Island  of  Sumatra  have  been  worked 
since  1892,  and  produce  about  5,000,000  tons  annually. 
The  laborers  in  these  mines  are  chiefly  recruited  from  the 
convict  station,  and  one-half  of  the  7,000  laborers  employed 
are  of  this  character.  The  government  takes  great  care  to 
supervise  the  conditions  under  which  the  laborers  work,  and 
their  efforts  along  these  lines  have  proven  worthy  of  emu- 
lation. 

Gold  Mining.— Although  the  Dutch  East  Indies  have 
had  the  reputation  of  being  rich  in  gold,  the  total  value  of 
gold  produced  amounts  only  to  about  $2,000,000  annually. 
Gold  is  found  in  Sumatra,  Borneo,  and  the  Celebes  in  beach 
deposits,  alluvial  deposits,  and  gravel  beds. 

Petroleum.— The  development  of  the  petroleum  industry 
is  of  comparatively  recent  date,  the  chief  centers  of  pro- 
duction being  Borneo,  northern  Sumatra,  eastern  Sumatra, 


INDUSTRIES  OF  THE  DUTCH  EAST  INDIES     197 

and  Java.    The  growth  in  the  use  of  kerosene  by-products 
has  contributed  very  greatly  toward  the  development  of 
the  industry.    About  1,500,000  tons  of  crude  oil  are  pro- 
duced annually  in  the  Dutch  East  Indies,  being  marketed 
in  China  by  three  large  companies  known  as  the  Royal 
Dutch,  the  Rochelle,  and  the  Asiatic  Petroleum  companies. 
Estate  Products  and  General  Trade. — There  are  two 
quite  distinct  kinds  of  trade  in  Dutch  East  Indian  prod- 
ucts.   The  trade  in  the  estate  products  of  the  Island  of 
Java  and  Sumatra  is  pretty  generally  controlled  by  large 
Dutch  interests,  while  the  trade  in  the  many  miscellaneous 
gums,  and  other  tropical  products  of  the  Outer  Possessions, 
is  nearly  all  centered  in  the  hands  of  the  Chinese,  whose 
entrepot  is  Singapore.    It  is  this  trade  in  Dutch   East 
Indian  products,  carried  on  by  Chinese,  that  has  built  up 
Singapore  into  one  of  the  greatest  primary  markets  of  the 
world.    The  importance  of  shipping  her  products  directly 
to  the  United  States  and  other  markets,  rather  than  through 
Holland,  has  become  more  and  more  apparent  to  the  Colony 
during  the  war  when  direct  trade  with  the  United  States 
was  made  imperative.    Since  that  time  a  very  strong  move- 
ment has  been  on  foot  among  a  large  section  of  the  Dutch 
colonials  to  build  up  their  own  markets  direct,  rather  than 
through  Holland.     The  importance  of  this  movement  to  our 
export  trade  in  the  Dutch  East  Indies  cannot  be  overesti- 
mated.   By  controlling  large  stocks  of  Dutch  East  Indian 
products  the  Germans  and  British,  before  the  war,  were 
able  to  divide  the  trade  in  manufactured  goods  between 
them.    Commerce  is  an  exchange  of  commodities,  and  no 
successful  trade  can  be  established  unless  our  ships  come 
back  as  well  filled  as  they  go  out.     It  is  necessary,  there- 
fore, to  purchase  direct  those  products  which  we  formerly 
bought  through  the  European  trading  countries,  and  in 
turn  to  sell  our  goods  directly  to  the  Colony. 


198 


TRADING  WITH  ASIA 


Questions 

1.  How  are  the  Dutch  East  Indies  divided  for  administrative 

purposes?    Name  the   four  trade  regions  of  the  second 
division  with  ports. 

2.  Discuss  the  development  of  agriculture  in  general. 

3.  How  has  the  sugar  industry  been  developed?    In  what  trade 

areas  is  it  principally  grown  ? 

t'  wu^^^*  ^^^°"  ^^  rubber  grown  ?    Discuss  the  tea  production. 

5.  Where  is  tobacco  chiefly  raised  and  under  what  methods  is  it 

cultivated?    Discuss  coffee  production. 

6.  What  are  the  present  and  future  prospects  of  copra  pro- 

duction and  the  coconut  oil  industry? 

7.  What  is  kapok?    Discuss  cinchona,  pepper  and  tapioca  pro- 

duction. ^ 

8.  Describe  the  tin-mining  industry  and  its  location. 

9.  Discuss  coal  and  gold  mining. 

10.  Where  is  petroleum  found  and  where  marketed! 


ri 


CHAPTER  XIII 

COMMERCIAL  METHODS  AND  MARKET  ANALYSIS  OP  THE  PHILn»PINES 

AND  DUTCH  EAST  INDIES 

The  Philippine  Islands 

The  import  trade  of  the  Philippines  for  the  twelve 
months  ending  June,  1919,  totaled  $107,000,000,  of  which 
$64,000,000  was  with  the  United  States,  $13,000,000  with 
Japan,  $6,000,000  with  China,  $6,000,000  with  French 
Indo-China,  and  most  of  the  balance  with  Great  Britain 
and  her  colonies.  This  trade  represented  a  substantial  in- 
crease over  the  total  imports  during  1918,  when  only  $83,- 
000,000  worth  of  goods  were  brought  in,  the  proportion  in 
which  they  were  supplied  by  the  various  countries  re- 
maining the  same. 

Cotton  Cloths.—The  greatest  single  item  of  import  was 
cotton  cloths,  of  which  80,000,000  yards,  valued  at  $16,000,- 
000,  were  bought  in  1919,  $13,000,000  worth  being  supplied 
by  the  United  States.  The  Philippines  are  one  of  the  few 
Oriental  markets  where  American  cloths  are  predominant, 
and  this  position  is  only  held,  it  is  feared,  because  of  the 
preferential  treatment  accorded  the  American  product  by 
the  Philippine  tariff,  which  is  so  constructed  as  to  give 
American  goods  a  market,  where  it  is  possible  to  do  so 
without  unnecessarily,  or  too  seriously,  increasing  the  cost 
of  living  of  the  Filipinos.  Another  factor  which,  even 
without  a  tariff,  would  place  American  cotton  goods  in  a 
favorable  position  is  the  efficient  marketing  methods  of 
America's  premier  merchandising  company  in  the  Philip- 
pines, the  Pacific  Commercial  Company,  whose  organiza- 
tion is  well  established  throughout  the  Islands  and  Is  in  a 

199 


'^! 


200 


TRADING  WITH  ASIA 


ii 


position  to  distribute  American  goods  with  comparatively 
very  little  overhead  expense.  This  fact  looms  large  in  the 
cotton  goods  industry,  in  which  business  is  generally  done 
on  so  slight  a  margin  that  every  cent  addcid  to  the  cost 
price  means  so  much  more  difficulty  in  competing  with 
others. 

Iron,  Steel  and  Machinery.— The  second  largest  item  of 
the  import  trade  of  the  Philippines  comprises  iron  and  steel 
and   machinery.    Iron   and   steel   and   machinery   which 
totaled  $7,000,000  each  are  supplied  almost  wholly  from  the 
United  States.     In  1919  machinery  almost  doubled  in  value 
and  this  was  accounted  for  by  the  number  of  trucks  and 
tractors  which  were  brought  in  from  America.    In  the 
spring  of  1919  a  tractor  demonstration  was  held  under 
Government   auspices,  in  which  a  number  of  American 
machines  were  entrants,  and  the  results,  though  not  given 
wide  publicity,  furnished  the  Government  with  a  clue  to 
the  most  satisfactory  types  for  its  own  use,  and  its  selec- 
tions have  been  widely  followed.    The  labor  scarcity  in  the 
l^hihppmes  IS  accountable,  more  than  anyt)iing  else,  for 
the  demand  for  tractors,  and,  with  no  policy  which  would 
seem  to  alleviate  conditions  in  sight,  the  demand  seems 
bound  to  increase. 

The  Future  of  the  Agricultural  Implement  Trade.— 
With  vast  quantities  of  undeveloped  land  simply  awaiting 
the  plow,  and  only  a  very  limited  population,  the  future 
development  of  the  Philippines  must  depend  either  upon 
the  more  extended  use  of  labor  saving  agricultural  imple- 
ments or  a  change  in  the  immigration  laws  which  would 
permit  indentured  Chinese  to  work  the  estates.  As  the 
latter  alternative  seems  remote  in  its  adoption,  attention 
has  been  turned  for  the  present  to  the  use  of  agricultural 
implements.  The  present  land  laws,  which  restrict  hold- 
ings  to  2,500  acres,  are  also  a  great  handicap  to  any  large- 
scale  development  of  the  Islands.    Many  companies  who 


MARKET  ANALYSIS  OF  THE  EAST  INDIES     201 

would  like  to  invest  money  in  the  development  of  rubber, 
coconut,  and  other  estates  cannot  do  so  under  the  present 
law.  If  the  United  States  is  to  grant  the  Philippines  their 
independence,  they  should  not  be  turned  loose  with  large 
tracts  of  rich,  tropical,  undeveloped  land,  practically  beck- 
oning to  neighboring  powers  to  com^  in  and  exploit.  In 
preserving  this  land  for  the  future  generations  of  the  Fili- 
pinos, whose  numbers  do  not  increase,  the  United  States 
may  be  working  against  the  best  interests  of  present  gen- 
erations, who  should  enjoy  at  the  present  time  the  pros- 
perity and  development  incident  to  a  wise  and  fair  invest- 
ment of  American  capital  on  a  sufficiently  large  scale  to 
make  it  both  profitable  and  safe. 

Rice.— Although  the  Islands  are  underpopulated  they  do 
not  produce  enough  food  for  the  population  they  have,  be- 
cause the  high  prices  which  the  principal  exports  command 
abroad  make  it  more  profitable  to  raise  hemp,  coconuts, 
sugar,  and  tobacco  and  to  import  rice  than  to  devote  the 
Islands'  lands  and  labor  to  rice  culture.  As  a  result  about 
150,000  tona  of  rice  are  imported  every  year,  valued  at 
$8,000,000,  principally  from  French  Indo-China  and  Siam. 
The  dependence  upon  foreign  sources  of  food  supply  caused 
the  Filipinos  much  concern  during  the  shipping  shortage  in 

1917  and  an  attempt  was  made  to  convert  a  certain  acreage 
to  rice  growing,  but  the  return  of  shipping  to  normal  soon 
made  this  program  unpopular. 

Wearing  Apparel.— Cotton  wearing  apparel  valued  at 
$3,000,000  is  the  next  largest  item  on  the  list  of  imports, 
and  this  trade  is  divided  almost  equally  between  the  United 
States  and  Japan,  where  low  grade  goods  can  be  produced 
much  more  cheaply. 

Coal.— The  import  of  coal  reached  a  total  value  of  $3,- 
000,000  in  1919,  which  was  almost  double  the  value  of  the 

1918  import,  although  the  tonnage  remained  the  same  at 
about  395,000  tons.    About  80  per  cent  of  this  coal  came 


202 


TRADING  WITH  ASIA 


from  Japan,  and  a  small  percentage  from  China.  The 
Islands  are  practically  dependent  upon  outside  sources  for 
coal,  and  what  deposits  there  are  in  the  Philippines  are  of 
lignite  or  brown  coal,  which  are  too  highly  combustible  for 
storage  or  transportation.  The  development  of  the  coco- 
nut  oil  crushing  industry  has  made  this  deficit  in  the 
Philippine  fuel  resources  doubly  apparent,  and  plans  to 
develop  hydro-electric  power  and  to  exploit  new  coal  fieldi 
are  under  way.  There  is  little  likelihood  of  the  Island* 
becoming  an  industrial  center,  however,  and  outside  of  the 
coconut  oil  industry  the  only  added  demands  for  coal  in  the 
future  are  likely  to  be  for  bunkering  in  case  Manila  de- 
velops as  an  entrepot  for  the  Oriental  shipping  trade. 

Wheat  Flour.— The  next  most  valuable  import  is  wheat 
flour,  $2,500,000  worth  of  which  was  brought  in  during 
1919,  over  90  per  cent  coming  from  Australia.  The  Fili- 
pinos  in  the  cities  and  other  more  civilized  centers  are  ac- 
quiring a  taste  for  wheat,  rather  than  rice,  and  although 
this  taste  in  many  cases  has  been  acquired  through  neces- 
sity, because  of  the  high  price  of  rice,  it  seems  to  have  be- 
come a  permanent  one  and  may  change  the  source  of  the 
Philippines'  food  supply  from  French  Indo-China  to 
Australia.  The  possibility  of  the  United  States  gaining 
a  share  of  this  wheat  trade  is  rather  remote,  owing  to  the 
longer  rail  and  water  haul  from  America's  wheat  belt. 

Illuminating  Oil.— Illuminating  oil  imports  valued  at 
$2,400,000,  practically  all  of  which  came  from  the  United 
States,  were  imported  during  the  1919  fiscal  year.  The 
preferential  duty  has  also  worked  in  favor  of  American 
trade  in  this  commodity,  because  if  all  things  were  equal, 
there  is  every  possibility  that  American  oil  would  have  to 
divide  the  market  with  Dutch  East  Indian  oil,  as  is  the 
case  in  China. 

Cotton  Yarns.— Cotton  yams  valued  at  $1,800,000  and 
other  yarns  valued  at  $2,300,000,  the  cotton  yams  coming 


MARKET  ANALYSIS  OF  THE  EAST  INDIES     203 

largely  from  Japan  and  the  other  yams  from  the  United 
States,  were  imported  during  1919.  Comparatively  little 
home  woven  cloth  is  made  in  the  Philippines,  the  standard 
of  living  being  high  enough  to  afford  the  purchase  of  the 
machine  woven  cloth. 

Paper  Goods. — Paper  and  manufactures  valued  at  $2,- 
250,000  is  the  next  most  valuable  import,  practically  all 
coming  from  the  United  States.  There  are  plans  on  foot 
to  manufacture  paper  in  the  Philippines  from  hemp  refuse, 
but  so  far  the  project  has  not  advanced  beyond  the  experi- 
mental stage.  Unless  some  such  development  takes  place 
there  is  every  likelihood  that  the  paper  imports  will  in- 
crease gradually  along  with  the  rising  standards  of  the 
people. 

Other  Imports. — Other  imported  articles  in  the  order  of 
their  value  are  leather  and  manufactures,  $1,500,000; 
** other  meat  and  dairy  products,''  $1,700,000;  condensed 
milk,  $1,300,000 ;  and  fresh  beef,  $700,000.  Most  of  these 
items  come  from  the  United  States,  except  the  last,  which 
China  and  Australia  supply. 

The  Future  of  American  Trade. — Future  American 
trade  in  the  Philippines  depends  largely  upon  what  policy 
is  adopted  toward  the  Islands  in  the  next  decade.  With  a 
strong  commercial  policy,  and  the  investment  in  harbor 
facilities  to  make  Manila  a  shipping  center  of  the  Orient, 
our  trade  should  not  only  increase,  but  our  commercial 
future  should  be  assured.  If  independence  is  to  be  granted 
the  Islands,  it  seems  desirable  that  a  strong  commercial 
hold  should  be  maintained  in  order  that  our  influence  may 
remain  supreme.  There  is  room  for  considerable  develop- 
ment in  Philippine-American  trade,  and  the  sooner  a  pol- 
icy looking  toward  the  development  of  the  Islands'  natural 
resources  is  adopted,  the  sooner  may  we  look  forward  to  a 
higher  purchasing  power  of  the  people  and  a  greater  mar- 
ket for  our  goods. 


.< 


204 


TRADING  WITH  ASIA 


MARKET  ANALYSIS  OP  THE  EAST  INDIES     205 


|i 


The  Dutch  East  Indies 

The  war  discovered  the  Dutch  East  Indies  as  a  market 
for  American  goods.  The  close  commercial  control  which 
Dutch  policy  had  maintained  up  to  that  time  and  which 
had  played  largely  into  the  hands  of  Germany,  whose  in- 
vestments through  Holland  in  the  Dutch  East  Indies  were 
large,  was  broken  down  by  the  closing  of  Mediterranean 
shipping  lanes.  It  was  not  until  then  that  American  busi- 
ness discovered  that  many  of  the  raw  products,  and  partly 
manufactured  materials  which  had  been  imported  from 
Holland  and  Germany  originated  in  the  Dutch  East  Indies. 
At  the  same  time,  a  large  portion  of  the  colonial  population 
began  to  realize  that  by  selling  their  products  through 
Europe,  they  were  not  only  deprived  of  the  best  prices,  but 
were  actually  paying  a  tribute  in  high  freight  and  dis- 
count rates.  This  mutual  recognition  of  interdependence 
awakened  a  keen  interest  in  this  country  in  Dutch  East 
Indian  products  and  in  the  Islands  themselves  as  a  poten- 
tial market  for  our  goods  to  replace  those  formerly  supplied 
by  Germany.  Direct  steamship  lines  were  inaugurated, 
and  direct  banking  connections  opened  up  in  New  York, 
and  the  result  was  a  tremendous  increase  in  Netherlands 
Indian-American  trade.  With  the  return  of  peace  there 
has  been  a  strong  tendency  on  the  part  of  the  **  Little  Hol- 
lander" element,  whose  affiliations  with  the  home  country 
are  so  close,  to  place  business  back  in  the  normal  chan- 
nels, and  to  a  certain  extent  this  has  been  done,  but  the 
direct  contact  with  America  has  awakened  an  interest  in 
trade  with  this  country  among  those  known  as  the  **  Dutch 
Colonials*'  which  will  not  be  soon  allayed. 

Total  Imports — Java  and  Madoera. — For  statistical  pur- 
poses the  import  figrures  for  the  Dutch  East  Indies  are  di- 
vided into  the  same  general  classes  as  the  export  figures, 
namely  those  for  Java  and  Madoera  in  one  class,  and  those 


for  the  Outer  Possession  in  the  other.  The  total  import 
trade  of  Java  and  Madoera  for  1918  was  valued  at  $145,- 
000,000  for  private  transactions,  and  $1,000,000  for  Gov- 
ernment account.  For  analytical  purposes  it  will  not  be 
necessary  to  consider  the  Government  imports  separately, 
because  they  constitute  the  same  general  items  as  the  pri- 
vate transactions.  This  total  in  value  represents  a  consid- 
erable increase  over  the  1913  import  value,  which  was  only 
$113,000,000,  and  which  was  the  normal  value  of  imports 
for  the  first  three  years  of  war,  increasing  in  1917,  because 
of  inordinately  high  prices,  to  $132,000,000.  If  the  statis- 
tics showing  volume  were  available,  they  would  probably 
show  a  considerable  decrease  under  1914  in  the  actual  ton- 
nage of  imports.  It  was  the  gradually  rising  prices  that 
tended  to  equalize  the  value  with  the  imports  of  preceding 
years. 

The  Possibilities  for  American  Cotton  Goods. — After 
deducting  such  items  as  rice,  coal,  tobacco,  and  tea,  articles 
which  the  United  States  could  not  supply  the  Dutch  East 
Indies  at  all,  or  only  at  a  great  disadvantage,  there  remains 
$75,000,000  worth  of  goods  in  which  it  is  possible  for  the 
United  States  to  compete.  Of  this  remainder  26  per  cent 
was  in  cotton  textile  imports  of  all  kinds,  representing  a 
total  value  of  $35,000,000.  This  trade  in  cotton  textiles  is 
a  trade  in  which  Japan  is  now  greatly  interested,  although 
before  the  war  it  was  monopolized  by  Germany  and  Great 
Britain.  The  competition  was  very  keen  and  the  margin 
of  profit  so  small  that  American  manufacturers,  who 
specialized  in  the  low-grade  prints  required,  preferred  to 
spend  their  efforts  on  some  other  markets  which  were  less 
effectively  exploited.  The  hold  which  Germany,  through 
Holland,  had  on  this  trade  and  other  trade  in  low-grade 
necessities  is  explained  by  the  fact  that  most  of  the  planta- 
tions and  estates  are  owned  by  Hollanders,  and  no  small 
part  of  the  profit  from  these  estates  has  been  derived  from 


!•; 


206 


TRADING  WITH  ASIA 


r 


\ 


the  estate  stores,  which  carry  a  complete  line  of  all  goods 
required  by  the  native.  When  the  natives  employed  on  the 
estate  are  paid  off,  it  is  estimated  that  the  transfer  of  the 
actual  money  is  only  temporary,  and  those  who  are  not 
already  indebted  to  the  company  for  their  supplies  soon 
turn  their  wages  back  into  the  company's  coffers  in  ex- 
change for  such  articles  as  they  need.  The  Dutch  Gov- 
ernment is  in  need  of  American  capital  at  the  present  mo- 
ment to  develop  the  vast  resources  of  Sumatra,  and  the 
opportunity  for  introducing  American  goods  into  the  Dutch 
East  Indies  would  seem  to  depend  largely  upon  how  much 
money  we  care  to  invest  in  the  undeveloped  resources  of  the 
Islands. 

Iron,  Steel  and  Machinery. — The  second  largest  item  of 
importance  comprises  machinery  and  iron  and  steel,  repre- 
senting 12  per  cent  of  the  total  imports,  or  about  $15,000,- 
000,  and  in  the  further  extension  of  the  copra-crushing 
industry,  the  development  of  the  sugar  estates,  and  rail- 
road and  hydro-electric  development  in  the  outlying  posses- 
sions, there  would  seem  to  be  a  large  opportunity  for 
American  machinery.  The  German  and  British,  however, 
maintain  on  the  ground  engineers  familiar  with  the  lan- 
guage. Some  of  the  German  engineers  who  were  detained 
in  the  Islands  at  the  outbreak  of  the  war  devoted  all  of  their 
available  time  in  perfecting  their  acquaintance  with  the 
Islands,  and  unless  American  firms  are  prepared  to  go 
after  the  business  in  the  same  manner,  only  a  small  portion 
of  it  may  be  hoped  for. 

Fertilizers. — Fertilizers,  representing  seven  per  cent  of 
the  total  imports,  or  $9,000,000,  are  next  in  importance. 
It  would  seem  that  this  item  was  inordinately  large  for 
such  a  tropical  country,  but  under  intensive  cultivation  in 
Java,  the  soil  rapidly  deteriorates,  especially  as  it  is  now 
only  possible  to  lease  it  for  a  limited  period  after  which  it 
must  be  turned  back  to  the  native  owners.    As  a  result 


MARKET  ANALYSIS  OF  THE  EAST  INDIES      207 

little  interest  is  taken  in  the  preservation  of  its  qualities, 
and  although  the  Government  requires  certain  rotations  of 
crops  from  the  lessees,  there  is  no  incentive  to  give  this 
more  than  the  perfunctory  attention  required.  As  a  mar- 
ket for  American  fertilizers  there  seems  little  possibility  in 
the  Dutch  East  Indies,  since  the  Chilean  nitrate  is  equally 
available,  and  while  shipments  of  phosphate  rock  from  the 
South  have  been  made,  the  high  freight  is  a  disadvanta- 
geous factor. 

Foodstuffs. — The  import  trade  in  foodstuffs  is  very 
great,  representing  five  per  cent  of  the  whole,  or  $8,000,000. 
This  is  largely  accounted  for  by  the  large  Chinese  popula- 
tion, who  import  many  of  their  native  delicacies  from 
China,  although  the  large  European  population  demands 
more  imported  food  than  ever  under  the  prosperous  con- 
ditions which  the  war  has  caused.  There  is  a  good  demand 
for  American  canned  goods  and  delicacies,  including  our 
specially  cured  hams,  which  the  Dutch  prize  very  highly. 
The  trade  in  cigars,  cigarettes,  clothing,  and  millinery  rep- 
resents another  five  per  cent  of  the  total  import  trade,  or 
$8,000,000,  and  comes  within  the  same  category.  The 
European  population  naturally  demands  European  styles 
in  clothing  and  millinery,  but  in  all  these  things  there  is  a 
certain  amount  of  trade  which  America  may  do  if  the  field 
is  properly  covered. 

Total  Imports — Outer  Possessions. — The  import  trade 
of  the  Outer  Possessions  presents  a  much  more  varied,  but 
infinitely  smaller,  opportunity,  and  in  general  the  percent- 
ages in  the  main  items  already  mentioned  remain  the  same. 
In  the  Eastern  Archipelago  the  demand  is  principally  for 
cotton  textiles  and  textiles  of  wool  and  silk  mixture,  repre- 
senting 25  per  cent  of  the  import  trade  of  that  district  and 
amounting  to  a  total  of  $5,000,000.  The  demand  for  cig- 
arettes represents  10  per  cent  of  the  total  trade ;  rice  about 
12  per  cent;  while  kerosene  and  cotton  yam  represent 


J 


208 


TRADING  WITH  ASIA 


i 


about  four  per  cent  each.  Macassar  in  the  Celebes  is  the 
principal  import  center  for  this  district. 

The  Sumatra  West  Coast.— The  Sumatra  West  Coast 
import  trade  totals  about  $4,000,000,  of  which  50  per  cent 
was  in  textiles,  six  per  cent  in  machinery  and  tools,  five 
per  cent  in  cigars  and  cigarettes,  and  three  per  cent  in  sheet 
tin.  Padang  is  the  center  for  this  district,  and  ia  an  out- 
port  of  Batavia. 

The  Sumatra  East  Coast.— The  Sumatra  Bast  Coast  im- 
port trade  is  the  most  important  outside  of  Java,  repre- 
senting a  total  value  annually  of  $26,000,000,  of  which 
$7,000,000,  or  about  26  per  cent,  is  rice  to  feed  the  many 
coolies  employed  on  the  rubber  and  tobacco  plantations. 
The  item  of  second  importance  is  cotton  textiles,  which 
totals  10  per  cent,  iron  and  steel  products,  five  per  cent, 
machinery,  four  per  cent,  sheet  tin,  three  per  cent,  bever- 
ages, three  per  cent,  cement,  two  per  cent,  and  railway 
material,  two  per  cent.  Many  other  items  including  such 
foodstuffs  as  canned  goods,  flour,  preserved  fruits,  etc.,  as 
well  as  chemicals,  paper,  fertilizers,  cigars  and  cigarettes 
enter  into  the  import  trade,  most  of  the  supplies  being 
transhipped  from  Batavia  to  Medan  and  Belawan  Deli,  the 
chief  ports. 

The  Singapore  Trade  Area. — The  imports  into  the  trade 
area  which  is  dominated  by  Singapore  were  divided  as 
follows:  out  of  a  total  import  of  $16,000,000  for  this  re- 
gion one-third  was  with  Palembang  District,  one-third  with 
the  Riow  Archipelago,  and  one-third  was  divided  between 
West  Borneo,  Djambi,  and  Indragiri.  The  proportions  by 
commodities  are  about  the  same  in  all  these  districts,  being 
25  per  cent  rice,  25  per  cent  cigars  and  cigarettes,  15  per 
cent  cotton  textiles,  and  the  balance  distributed  between 
foodstuffs,  sheet  tin,  matches,  and  machinery. 

Credit  Terms. — A  thorough  study  of  the  Dutch  Bast 
Indies  market  should  well  repay  any  firm  in  a  position  to 


MARKET  ANALYSIS  OF  THE  EAST  INDIES      209 

extend  the  long  90  and  120-day  credits  which  European 
practice  has  made  necessary.  Since  the  risks  are  mostly 
Chinese  whose  reputations  are  usually  beyond  reproach, 
good  business  could  be  worked  up  with  proper  effort.  To 
those  manufacturing  firms  requiring  larger  quantities  of 
rubber,  coconut  oil,  tapioca,  etc.,  the  opportunity  is  open 
for  investment  in  undeveloped  land  and  the  enjoyment  of 
a  correspondingly  large  share  of  the  import  trade. 

The  Growth  of  Free  Trade  in  the  Dutch  East  Indies. — 
In  the  Dutch  East  Indies,  the  abolition  of  the  narrow  pro- 
tectionist system  in  1872,  which  had  acted  so  detrimentally 
upon  the  general  development  of  the  colony  was  brought 
about  largely  by  the  example  of  the  development  of  Singa- 
pore under  British  free  trade.  A  number  of  ports  were 
opened  subject  to  the  same  provisions  as  applied  to  Dutch 
ports  under  Holland's  commercial  treaties  with  the  pow- 
ers. The  heavy  anchorage  and  pilot  dues  under  the  pro- 
tectionist regime  were  abolished,  and  the  vessels  of  all 
friendly  powers  were  freely  admitted  to  the  **open''  ports. 
To  the  other  ports  only  native  vessels  and  those  authorized 
to  take  part  in  the  coasting  trade  under  the  Dutch  flag  are 
admitted.  The  port  of  Macassar  in  the  Celebes  has  been  a 
free  port  since  1848.  The  import  duties  in  other  open 
ports  are  nominal,  and  for  revenue  only,  ranging  from 
three  to  seven  per  cent,  there  being  no  reason  for  a  pro- 
tectionist policy  due  to  the  absence  of  industries  and  the 
dominant  position  of  agriculture. 

The  Dutch  East  Indies  Trade-Mark  Law.— In  1893  a 
law  was  passed  providing  for  the  registration  of  trade- 
marks in  the  colony,  and  this  law  has  been  revised  twice, 
once  in  1905  and  again  in  1908.  In  1912  the  increased  de- 
mands for  trade-mark  registration  necessitated  the  organi- 
zation of  a  special  office  for  the  control  of  property  rights 
and  this  was  termed  the  Industrial  Property  Bureau 
(Trade-mark    Branch)  under  the  Department  of  Agricul- 


% 


210 


TRADING  WITH  ASIA 


I 


ture,  Industry,  and  Commerce.  Applications  for  trade- 
marks must  be  accompanied  by  accurate  descriptions  and 
two  clear  proof  impressions,  together  with  specified  dimen- 
sions.   They  may  be  refused  on  the  following  grounds: 

1.  Where  a  trade-mark  resembles  another  mark,  already 
applied  for,  either  in  subject  or  in  its  entirety. 

2.  Trade-marks  containing  immoral  words  and  contrary 
to  the  public  interest. 

3.  Where  the  trade-mark  resembles  the  seal  of  a  public 
association  or  company. 

Appeal  over  decisions  of  the  Bureau  may  be  taken  to  the 
Court  of  Justice  in  Batavia.  Trade-marks  may  also  be  can- 
celled when  they  are  found  to  resemble  marks  of  prior  reg- 
istry or  infringe  upon  a  firm  name  already  in  use. 

The  Dutch  Colonial  Legal  System. — The  Dutch  colonial 
system  falls  under  two  heads,  laws  relating  to  Europeans 
and  foreigners,  and  laws  governing  natives,  including  in 
criminal  procedure  Chinese,  Arabs,  and  other  Asiatics. 
Where  foreigners  are  concerned  both  the  law  invoked  and 
its  administration  are  made  as  similar  as  practicable  to 
the  law  of  the  foreigner's  native  country.  This  is  particu- 
larly true  of  the  civil  and  commercial  codes,  and  the  **New 
Indian  Criminal  Code,''  recently  adopted,  is  based  upon  the 
Criminal  Code  of  Holland,  which  follows  the  same  prin- 
ciple. On  the  other  hand,  in  administering  the  law  where 
natives  are  concerned,  the  old  native  law,  as  originally 
evolved  from  their  religions,  customs,  and  institutions  is 
followed  as  far  as  possible,  and  where  it  does  not  conflict 
with  the  principles  of  equity.  Dutch  civil  and  mercantile 
law  is  used  where  the  native  law  is  inadequate.  The  great 
difficulty  in  a  proper  administration  of  uniform  native  law 
throughout  the  colony,  is  the  heterogenous  character  of 
the  law  itself,  influenced  as  it  has  been  by  different  creeds 
including  Hinduism  and  Mohammedanism,  and  the  varying 
economic  conditions  of  the  different   tribes.     It  has  been 


MARKET  ANALYSIS  OF  THE  EAST  INDIES      211 

possible,  therefore,  to  codify  the  native  law  only  in  certain 
parts  of  the  colony.  The  Arabs,  Hindus,  and  other  Asiatic 
settlers,  who  would  ordinarily  be-  subject  to  native  law, 
have  been  exempt  from  this,  and  enjoy  the  same  rights  as 
Europeans  as  far  as  civil  and  commercial  law  is  concerned. 
But  in  matters  relating  to  family  life,  succession,  marriage, 
divorce,  etc.,  European  law  is  not  applied,  but  rather  the 
laws  and  customs  of  their  own  native  countries.  In  certain 
cases,  as  in  drawing  up  a  contract,  natives  and  Asiatic  aliens 
may  conform  to  European  law  if  they  so  desire,  but  in  such 
cases  it  is  usually  stated  which  of  the  two  prevailing  legal 
systems,  native  or  European,  is  to  be  used  in  interpreting 
the  document. 

The  Character  of  the  Courts.— There  is  a  still  further 
distinction  in  the  administration  of  the  law  in  the  Dutch 
East  Indies.  The  courts  which  administer  law  in  the  name 
of  the  Crown  are  thus  distinguished  from  those  which  do 
not.  In  the  former  category  there  are  three  groups  of 
courts. 

1.  The  Magisterial,  or  Residential  Courts,  are  held  by 
officials  in  the  legal  branch  of  the  civil  service,  and  deal 
with  minor  civil  and  criminal  cases. 

2.  The  Superior  Courts  of  Justice,  of  which  there  are 
three  in  Java,  one  in  Sumatra,  and  one  in  Celebes,  try 
similar  cases  of  a  major  character. 

3.  The  High  Court  of  Justice  at  Batavia  is  the  Court  of 
Appeal  or  Cassation. 

The  ''Landraads." — In  addition  to  these  courts  are  the 
**Landraads,"  which  are  the  most  important  administrative 
and  judicial  bodies  in  the  colony,  as  far  as  the  native  is 
concerned.  They  are  presided  over  by  Dutch  judges  and 
their  membership  is  composed  of  the  native  nobility,  some 
being  nominated  for  the  position  by  the  Governor  General, 
and  some  sitting  by  reason  of  another  official  position. 
They  take  cognizance  of  both  criminal  and  civil  actions. 


Vi^i^n 


212 


TRADING  WITH  ASIA 


II' 


Appeal  from  these  courts  may  be  taken  to  the  courts  of 
justice  outlined  above.  A  native  adviser  attached  to  each 
**Landraad''  is  consulted  by  the  court  as  to  the  tribe  and 
religion  of  the  accused  in  order  that  the  proper  native  law 
may  be  applied. 

Native  Courts  in  Independent  Principalities.— Among 
the  courts  which  do  not  administer  the  law  in  the  name  of 
the  Crown  are  the  native  courts  in  the  independent  princi- 
palities and  those  in  certain  parts  of  the  colony  which,  for 
political  reasons,  have  been  left  in  the  enjoyment  of  their 
own  jurisdiction.  The  transactions  of  these  courts  are 
under  the  direct  supervision  of  the  Dutch  East  Indian 
Government,  which  sees  that  justice  is  done  and  barbarous 
punishments  are  forbidden.  A  Dutch  civil  service  official 
attends  these  courts  as  an  adviser. 

As  a  whole  the  administration  of  the  commercial  law  in 
the  Dutch  East  Indies  is  simple  and  not  costly  and  the  pro- 
cedure is  much  the  same  as  in  Holland.  The  High  Court 
exercises  supervision  over  the  entire  legal  administration  of 
the  colony,  and  in  this  way  abuses  and  corruption  are  very 
much  more  easily  prevented. 

Questions 

1.  What  factors  contribute  to  the  American  control  of  the  textile 

trade  of  the  Philippines? 

2.  What   has  accounted  for  the   large  incrsase  in  machinery 

imports  in  the  Philippines? 

3.  Why  are  the  Philippines  dependent  upon  outside  supplies  of 

rice? 

4.  What  is  the  significance  and  reason  for  coal  imports  in  the 

Philippines? 

5.  What  are  some  of  the  considerations  upon  which  future 

American  trade  depend? 

6.  Discuss  the  triangular  trade  of  the  Dutch  East  Indies  with 

America  before  the  war. 

7.  How  does  ownership  of  estates  in  the  Dutch  East  Indies 

control  the  import  trade? 


MARKET  ANALYSIS  OF  THE  EAST  INDIES     213 

8.  How  does  Germany  dominate  the  machinery  trade  of  the 

Dutch  East  Indies? 

9.  What  led  to  the  revision  of  the  Dutch  colonial  tariff  policy? 
10.  Describe  the  Dutch  colonial  judicial  system. 


BIBLIOGRAPHY  TO  PART  II 
The  Dutch  East  Indies  and  the  Philippines 

General  History 

Dutch  East  Indies 

Crawford^  John: 

History  of  the  Indian  Archipelago,    Edinburgh,  1820. 
Day,  Clive: 

The  Butch  in  Java.    New  York,  1904. 
De  Witt,  Augusta: 

Java,  Facts  and  Fancies.    Philadelphia,  1900. 
Sheltema,  J.  F. : 

Monumental  Ja/oa.    New  York,  1912. 

Philippine  Islands 

Arnold,  J.  R. : 

The  Philippines,  the  Land  of  Palm  and  Pine,  an  official 
guide  and  handbook.    Manila. 
Atkinson,  F.  W.  : 

The  Philippine  Islands.    Boston,  1905. 
Barrows,  D.  P. :  ^ 

History  of  the  Philippines.     Indianapolis,  1908. 
Blair,  E.  H.,  and  Robertson,  J.  A. : 

The  Philippine  Islands,  fifty-five  volumes.    Cleveland.  1909 
Chamberlin,  F.  : 

The  Philippine  Problem,  1898-1913.    Boston,  1913 
Crow,  Carl: 

America  and  the  Philippines.    New  York,  1914. 
Foreman,  J. : 

The  Philippine  Islands.    London. 
Ireland,  Alleyne : 

The  Far  Eastern  Tropics.    Boston,  1905. 
Jernegan,  p.  p.  F.  : 

A  Short  History  of  the  Philippines.    New  York. 

214 


BIBLIOGRAPHY 


216 


Leroy,  James  A. : 

The  Americans  in  the  Philippines.  Boston,  1914. 
Lindsay,  C.N.  Forbes: 

America's  Insular  Possessions.  Philadelphia,  1906. 
Miller,  Hugo  H.  and  Storms,  Charles  H. : 

Economic  Conditions  in  the  Philippines.    Boston,  1913. 
Philippine  Government: 

Report  of  the  Philippine  Commission  to  the  Secretary  of 

War  (1914).    Washington. 
Report  of  the  Governor  General  of  the  Philippine  Islands  to 

the  Secretary  of  War  (1916).    Washington. 
Report  of  the  Governor  General  of  the  Philippine  Islands  to 

the  Secretary  of  War  (1917).    Washington. 
Philippine  Government: 

The   Code  of  Civil  Procedure  of  the  Philippine  Islands. 
Manila. 
Williams,  D.  R.: 

The  Odyssey  of  the  Philippine  Commission.     Chicago.  1913l 
Worcester,  Dean  C. :  v-g  ,      xo. 

The  Philippines  Past  and  Present.    New  York,  1914. 
The  Philippine  Islands  and  Their  People.    New  York  1909 
Wright,  H.  M.  :  '         ' 

A  Handbook  of  the  Philippines.    Chicago. 

Geography— Commercial,  Political  and  Physical,  and 

Market  Analysis 

Dutch  East  Indies 
Boys,  H.  S.  : 

^'"^le^o''*^*  ^^  '^^'"^  ^*^^  ^^^  ^^^i^^iration.    AUahabed, 
Bureau  of  Foreign  and  Domestic  Commerce: 

Commerce  Reports  Supplements  (Dutch  East  Indian  Ports) 
Washington,  D.  C. 

Miscellaneous  Series,  No.  10,  "Advertising  Mediums."  Wash- 

mgton,  D.  C,  1913. 
Special  Agent  Series,  No.  92,  "Canned  Goods."    Washington, 

n'  ^^.a      '  ^'''  ^^^'  "^''**^''  ^^^^^-^    Washington,  D. 
\j.f  JL91o. 

Special  Consular  Reports,  No.  53,  "Automobiles."    Washinir- 

y^'J^'J^"  i^^^'    ^°-   ^^>   "^ai^ts    and   Varnishes/' 
Washington,  D.  C,  1912. 


n 


216 


TRADING  WITH  ASIA 


Cabaton^  a.  : 

Java,  Sumatra  and  the  Dutch  East  Indies.    Ix)ndon,  1914. 
Department  of  Agriculture,  Industry  and  Commerce: 

Exporters'   Directory    of   the   Dutch   East   Indies    (1918). 
Buitenzorg. 

Yearbook  of  the  Netherlands  East  Indies  (1916).    Buiten- 
zorg. 
Jenks,  J.  W. : 

Report  on  Certain  Economic  Problems  in  the  English  and 
Dutch  Colonies  of  the  Orient.    Washington,  1902. 
MOBEY^  J.  W.  B.: 

Java,  or  How  to  Manage  a  Colony.    London,  186L 

Agriculture,  Industry  Aism  Market  Analysis 

Philippines 
Bureau  of  Foreign  and  Domestic  Commerce: 

Annual  Series,  No.  80a,  supplement  to  Commerce  Reports, 
"Analysis  of  Exports  and  Imports."    Washington,  D.  C. 
MisceUaneous  Series,  No.  106,  "Trade  of  the  United  States 
with  the  World,  1918  and  1919,"  Part  I,  "Imports"; 
Part  II,  "Exports."    Washington,  D.  C. 
Special  Agent  Series,  No.  67,  "Resources  and  Industries.'' 
Washington,  D.  C,  1913;  No.  161,  "Shoe  and  Leather 
Trade  in  the  Philippine  Islands."    Washington,  D.  C, 
1917;  No.  88,  "Lumbering  Industry  of  the  Philippines.*' 
Washington,  D.  C,  1914 ;  No.  95,  "Rattan  Supply  of  the 
Philippines."    Washington,  D.  C,  1915;  No.  91,  "Pine- 
apple-Canning Industry  of  the  World."    Washington, 
D.  C,  1915;  No.  13,  "Cotton  Fabrics  in  th«  Philippines." 
Washington,  D.  C,  1907;  No.  92,  "Canned  Goods  in  tht 
Far  East."    Washington,  D.  C,  1915. 
Annual  Series,  No.  80b,  "Industrial  and  Agricultural  Condi- 
tions."     Washington,  D.  C. 
Miller,  Hugo  H.  and  Storms,  Charles  H. : 

Economic  Conditions  in  the  Philippines.    Boston,  1913, 
Ireland,  Alleyne: 

The  Far  Eastern  Tropics.    Boston,  1905. 
Philippine  Government: 

Report  of  the  Philippine  Commission  to  the  Secretary  of 
War  (1914).    Washington,  D.  C. 


BIBLIOGRAPHY 


217 


Report  of  the  Governor  General  of  the  Philippine  Islands  to 
the  Secretary  of  War  (1916).     Washington,  D.  C. 

Report  of  the  Governor  General  of  the  Philippine  Islands  to 
the  Secretary  of  War  (1917).    Washington,  D.  C. 

Philippine  Commerce,  Shipping  and  Immigration.  Annual 
Report  of  the  Bureau  of  Customs  of  the  Philippines  for 
the  Year  Ending  December  31,  1917.    Manila. 


i^;i! 


PART  III 


BRITISH  INDIA,  BURMA  AND  CEYLON 


■  c- 


Ill 


CHAPTER  XIV 

HISTORY    AND    GOVERNMENT   OP    BRITISH    INDIA 

When  Vasco  de  Gama,  as  a  representative  of  King  Man- 
uel of  Portugal,  arrived  at  Calicut  on  the  west  coast  of 
India  in  1498,  he  was  acting  in  accordance  with  an  agree- 
ment between  the  Spanish  and  Portuguese  sovereigns,  sanc- 
tioned by  Pope  Julius  II,  which  partitioned  the  world  from 
a  meridian  in  the  Atlantic  into  an  eastern  and  a  western 
hemisphere  allotted  respectively  to  Portuguese  and  Spanish 
exploration.  The  history  of  Indian  contact  with  the  West 
is  nearly  as  ancient  as  Western  history  itself,  and  while 
such  early  intercourse  had  always  been  actuated  by  com- 
mercial motives,  this  visit  of  the  Portuguese  may  be  said 
to  mark  the  beginning  of  direct,  modern  intercourse  between 
India  and  Europe.  The  Moors,  who  had  conducted  a  lucra- 
tive trade  with  the  Indian  princes,  attacked  the  Portuguese 
and  prevented  the  full  consummation  of  de  Gama's  plans, 
and  although  his  returning  ships  brought  home  no  cargo, 
his  accounts  of  the  riches  of  India  soon  stirred  the  Portu- 
guese to  ambitious  and  far  reaching  plans  for  commercial 
conquest.  A  fleet  of  13  ships  and  1,500  men  under  Cabral 
arrived  in  Calicut  after  a  stormy  voyage  which  drove  them 
upon  the  coast  of  South  America  as  the  discoverers  of 
Brazil.  After  waiting  in  vain  for  a  cargo  they  were  again 
attacked  by  the  jealous  Moors.  In  this  encounter  the 
Portuguese  were  the  victors  and  after  killing  600  Moors 
and  enslaving  the  rest,  they  appropriated  the  Moorish  ship» 
and  cargo  and  set  sail  for  Cochin  farther  down  the  coast. 
Here  the  accounts  of  their  prowess  had  preceded  the 
Portuguese  who  were  welcomed  with  much  pomp  and  re- 

221 


I 


222 


TRADING  WITH  ASIA 


ceived  by  ambassadors  from  all  the  neighboring  principali- 
ties. Before  returning  to  Portugal  in  1501  Cabral  had 
opened  '^factories"  at  Cochin  and  Cananore  and  left  in 
charge  Portuguese  factors. 

The  Conquests  of  Albuquerque.— The  opening  of  direct 
intercourse  with  India  now  incited  the  envy  of  the  Sultan 
of  Egypt,  through  whose  domain  Indian  wares  had  for- 
merly reached  Europe,  and  with  the  aid  of  Venetian  car- 
penters he  built  a  fleet  in  the  Red  Sea.    This  fleet,  manned 
with  Turkish  sailors,  was  finally  defeated  by  the  Portu- 
guese in  the  Indian  Ocean  in  1508.    In  1506  Alfonso  Al- 
buquerque with  460  men  sailed  for  India,  met  and  de- 
feated a  large  force  under  the  King  of  Ormus,  and  estab- 
lished a   Portuguese   fort.    He  also   finally  subdued  the 
King  of  Calicut  and  captured  and  fortified  the  island  of 
Goa,  which  he  chose  as  the  capital  of  the  new  Portuguese 
empire  in  Asia.     By  a  system  of  forts,  custom  houses,  and 
law  courts  he  succeeded  not  only  in  supporting  his  army 
from  Indian  resources  but  established  a  commercial  and 
political  supremacy  over  the  neighboring  princes  which  was 
the  real  beginning  of  Western  domination.    Malacca  was 
chosen  from  the  standpoint  of  its  strategic  position  as  sec- 
ondary only  in  importance  to  Goa,  and  a  settlement  in  Cey- 
lon was  made  the  entrepot  for  the  spice  island  trade  of  the 
Indian  Ocean. 

The  Portuguese  in  India.—On  his  death  in  1515  the  do- 
minions which  Albuquerque  had  established  were  turned 
over  to  a  succession  of  cruel  and  rapacious  Portuguese  Gov- 
ernors who  well  nigh  destroyed  the  prestige  of  the  Portu- 
guese in  India.  In  1524  Vasco  de  Gama  was  selected  for  a 
third  voyage  to  India  in  an  effort  to  bring  order  out  of 
chaos,  but  his  attempts  to  suppress  the  Moors,  once  more 
the  thorn  in  the  Portuguese  side,  were  cut  short  by  his 
death  the  next  year.  Nunio  de  Cunha,  who  now  assumed  the 
governorship  at  Goa,  was  a  wise  and  just  administrator  and 


HISTORY  OF  BRITISH  INDIA 


223 


the  colony  which  he  turned  over  to  his  successors  had  un- 
dergone a  remarkable  period  of  progress.  During  all  this 
time,  however,  the  Turks  were  conspiring  with  disaffected 
Hindu  princes  in  an  attempt  to  overthrow  Portuguese 
power.  While  not  entirely  successful,  this  confederacy  was 
able  to  effect  the  expulsion  of  the  Portuguese  from  the 
Molucco  Islands,  Malacca,  and  Ceylon,  and  when  in  1580 
King  Philip  II  of  Spain  became  master  of  Portugal,  the 
amount  of  goods  shipped  from  India  to  Lisbon  was  found 
to  be  insufficient  to  defray  even  the  expenses  of  the  Indian 
Government.  In  1587  King  Phillip,  in  consideration  of  an 
annual  payment,  turned  over  the  exclusive  privilege  of 
trading  with  India  to  the  Portuguese  East  India  Company, 
still  retaining  the  sovereignty  and  territorial  revenue  of 
India. 

A  period  of  private  exploitation  now  set  in,  during  which 
not  only  was  all  attempt  at  just  administration  abandoned, 
but  officials  and  merchants  alike  combined  to  plunder  all 
those  too  weak  to  resist  them.  To  add  to  the  general  dis- 
tress an  order  from  the  Pope  in  1594  regarding  conversion 
of  the  natives  was  used  as  an  excuse  for  destroying  the 
pagodas  and  temples  and  confiscating  the  wealth  in  the 
sacred  depositories. 

The  Decline  of  Portuguese  Influence.— Meanwhile,  the 
Dutch,  deprived  of  the  supply  of  Indian  goods  through  Lis- 
bon, arrived  in  Java  in  1595  and  in  1602  the  first  ships 
belonging  to  the  English  East  India  Company  arrived  in 
India,  both  in  quest  of  direct  trade.  This  aroused  the 
hostility  of  the  Portuguese  who  practiced  on  the  newcom- 
ers all  the  arts  of  warfare,  which  a  century  before  had  been 
used  upon  them  by  the  Moors.  The  Portuguese  of  India 
were  by  this  time  mostly  natives  of  the  country,  of  a  mixed 
race,  with  Indian  blood  predominating.  The  Viceroys  gave 
their  whole  attention  to  the  accumulation  of  wealth. 
Every  commander  of  a  fort  and  every  captain  of  a  vessel 


ii 


224 


TRADING  WITH  ASIA 


was  an   independent   sovereign,   and  the   Spanish   court, 

which  paid  little  attention  to  Portuguese  affairs,  was  still 

less  interested  in  the  government  of  India.    By  1606  the 

Portuguese  had  lost  many  of  their  settlements  and  ships  and 

their  commerce  was  continually  harassed  by  the  Dutch  from 

without  and  the  Moguls  and  native  princes  from  within, 

while  despairing  of  receiving  any  revenue  from  his  Indian 

possessions,  now  a  burden  on  his  treasury,  the  King  of 

Spam  ordered  every  colonial   office  sold  to  the   highest 

bidder.    In  1656  Ceylon  was  captured  by  the  Dutch,  while 

the  ecclesiastical  viceroys  in  power  at  Gao  made  no  exer- 

tions  to  recover  their  sinking  empire. 

Portuguese  Conciliation  with  England.— With  the  resto- 
ration of  a  Portuguese  King  in  1640  an  era  of  conciliation 
with  the  English  set  in,  largely  as  a  result  of  the  friendly 
relations  between  the  new  Portuguese  Government  and  Eng- 
land.    Furthermore,  many  Portuguese  captains  and  vesseli 
were  employed  by  the  English  East  India  Company  in  the 
Indian  coasting  trade.     In  1687  the  King  of  Portugal  re- 
scinded the  privileges  granted  the  Portuguese  East  India 
Company  and  prohibited  private  trade  between  India  and 
Lisbon.     In  1773  the  title  of  Viceroy  was  abolished  and  a 
Captam-General  was  appointed  at  Goa,  while  the  garrison 
was  paid  in  money  instead  of  food  and  necessaries,  as  here- 
tofore, thus  ending  a  long  standing  abuse.     By  1812  the 
Portuguese  possessions  in  India  had  diminished  until  they 
consisted  only  of  those  at  the  Island  of  Diu  and  several 
posts  on  the  Gulf  of  Cambay. 

Early  Adventures  of  the  London  Merchants.— After 
many  attempts  to  reach  India  by  some  other  route  than 
by  way  of  the  Cape  of  Good  Hope,  notably  the  northwest 
passage  of  the  Cabots,  the  London  merchants  finally  suc- 
ceeded in  1606  in  sending  a  representative  to  Agra,  where 
he  obtained  an  ample  grant  of  commercial  privileges  from 
the  Great  Mogul.    Because  of  the  prior  rights  of  the  Portu- 


HISTORY  OF  BRITISH  INDIA 


225 


guese  to  the  Good  Hope  route,  English  merchants  had 
been  forced  to  trade  through  Venetian  ''factories"  in  Tur- 
key and  Arabia,  at  the  same  time  depending  upon  Lisbon 
for  the  greater  part  of  the  supply  of  Indian  products.     But 
the  war  with  Spain  in  1587  and  the  success  of  the  Dutch  in 
Java  spurred  the  London  merchants  to  form  an  East  India 
Company  in  1599  with  an  original  capital  of  £30,000.     This 
company,  which  received  a  royal  charter  from  Queen  Eliza- 
beth the  next  year,  was  granted  the  privilege  of  trading 
**  during  fifteen  years  to  all  parts  of  Asia,  Africa,  and 
America,  beyond  the  Cape  of  Good  Hope,  eastward  to  the 
Straits  of  Magellan,  except  such  countries  or  ports  as  may 
be  in  the  actual  possession  of  any  Christian  Prince  in 
amity  with  the  Queen.''    The  Company  was  granted  (1) 
the  right  to  make  by-laws  regulating  its  business  and  the 
people  in  its  employ  consistent  with  the  laws  of  the  realm; 
(2)  exemption  from  export  duties  for  the  first  four  voyages, 
and  the  right  of  re-exportation  of  Indian  goods  within  a 
year  free  of  import  duty;  (3)  the  right  to  export  silver 
coin  to  the  amount  of  £6,000,  provided  a  like  amount  was 
imported  within  six  months ;  (4)  all  other  subjects  of  the 
Queen  were  forbidden  to  trade  in  the  territory  assigned 
to  the  Company.    At  the  expiration  of  fifteen  years  if  the 
trade  was  found  to  be  beneficial  to  the  realm  the  letters 
patent  were  to  be  renewed  for  another  fifteen  years. 

Early  Activities  of  the  East  India  Company.— In  1602 
four  of  the  East  India  Company's  ships  under  Admiral 
Lancaster  arrived  at  Acheen  on  the  Island  of  Sumatra  and 
a  treaty  of  amity  was  concluded  with  the  King.  Failing  to 
obtain  a  cargo  because  of  the  failure  of  the  pepper  crop, 
Lancaster  decided  to  join  the  Dutch  in  driving  the  Portu- 
guese from  Malacca,  and  on  the  journey  a  richly  laden 
Portuguese  ship  was  captured.  The  cargo  was  sent  home 
in  one  of  the  English  ships  and  the  others  proceeded  to 
Bantam  in  Java.    After  a  favorable  reception,  they  sailed 


226 


TRADING  WITH  ASIA 


for  London  arriving  there  in  1603  with  full  cargos.    After  a 

second  voyage  in  1604  many  of  the  members  of  the  East 

India  Company,  overstocked  with  pepper  for  which  there 

was  no  ready  market,  were  inclined  to  drop  the  Indian  trade 

altogether.     They  were  disheartened  moreover  by  a  license 

which  had  been  granted  to  Sir  Edward  Michelbourne  by 

King  James  to  conduct  a  voyage  to  China,  Japan,  and 

Korea  which,  though  unfruitful,  was  properly  regarded 

as  an  infringement  upon  their  charter.    More  courageous 

counsels  prevailed  and  in  1607,  on  the  third  voyage,  an 

attempt  was  made  to  open  trade  with  the  Mogul  at  Agra 

by  establishing  a  **  factory '*  at  Surat.    This  was  thwarted 

by  the  machinations  of  the  Portuguese.    It  was  not  until 

the  fifth  voyage,  made  by  Captain  Meddleton  in  1609  to 

the  Moluccas,  that  a  really  profitable  cargo  was  returned 

netting  the  members  211  per  cent.    Encouraged  by  this 

the  Company  asked  for  an  extension  of  their  charter  from 

1615  and  the  King  was  so  well  disposed  toward  the  venture 

that  a  charter  in  perpetuity  was  granted  the  Company  in 

the  same  year. 

The  "Separate  Traders.''— The  varying  fortunes  of  the 
East  India  Company  during  the  next  century,  during 
which  period  the  trade  steadily  increased,  finally  culmi- 
nated in  a  contest  for  the  supremacy  in  the  Indian  trade 
with  a  rival  company  in  1698.  The  Government,  being  in 
need  of  a  loan,  was  able  to  obtain  it  on  more  advantageous 
terms  from  a  new  group  known  as  the  "separate  traders" 
and  they  were  "empowered  forever  to  trade  personally  or 
by  their  agents  in  all  parts  of  Asia,  Africa,  and  America 
beyond  the  Cape  of  Good  Hope  eastward  as  far  as  the 
Straits  of  Magellan,  each  on  his  own  separate  account  and 
to  an  amount  not  exceeding  in  any  one  year  the  total 
stock  held  by  him."  Any  number  of  members,  however, 
could  unite  their  capital  and  trade  together  under  a  royal 
charter.    It  is  believed  that  these  "separate  traders"  were 


HISTORY  OF  BRITISH  INDIA 


227 


supported  by  the  Dutch  who  hoped  to  destroy  the  English 
East  India  Company  and  certainly  the  option  left  to  each 
of  the  subscribers  to  trade  upon  his  own  account  was  aimed 
in  this  direction.     ''The  English  Company  Trading  with 
the  East  Indies,'*'  with  a  capital  of  £2,000,000  was  formed 
in  the  same  year  with  many  privileges.     The  flood  of  Indian 
goods,  including  muslins,  silks,  etc.,  now  resulting  from 
this  unrestricted  trade  soon  began  to  work  hardship  upon 
the  English  textile  workers  of  London,  Norwich,  and  Cov- 
entry and  in  1700  Parliament  passed  an  act  providing  "that 
after  the  29th  of  September,  1701,  no  wrought  silks,  ben- 
gals, no  stuffs  mixed  with  silk  and  herba  shall  be  worn  or 
used  in  England  except  such  as  are  made  into  apparel  or 
furniture  before  that  day  and  that  all  goods  imported  after 
that  day  must  be  warehoused  and  exported."    This  law 
had  a  disastrous  effect  upon  the^  stock  of  the  Old  Company, 
as  the  original  East  India  Company  was  called,  and  merely 
incited  both  groups  to  keener  hostility  and  competition  for 
the  Indian  trade.     This  ruinous  course  was  finally  brought 
to  an  end  by  a  combination  of  the  rival  interests,  effected 
in  1702  when  the  "United  Company  of  Merchants  of  Eng- 
land Trading  to  the  East  Indies"  was  formed.     The  Old 
Company  conveyed  to  the  New  Company  the  forts  and  is- 
lands of  Bombay;  the  factories  of  Surat,  Swally,  Broach, 
Amadavod,  Agra,  and  Lucknow ;  the  forts  of  Carwar,  Tel- 
lichery,  Anjergo,  and  Calicut;  Port  St.  David  at  Pondi- 
chery.  Fort  St.  George  at  Madras,  Fort  William  at  Cal- 
cutta and  numerous  other  forts,  posts,  and  factories  in 
India,  Persia,  Cochin-China,  Sumatra,  and  Java. 

Clive  and  the  French. — ^With  the  Persian  invasion  in 
1739  the  power  of  the  Great  Mogul  was  weakened  and  the 
political  importance  of  the  English  and  French  in  India 
was  greatly  increased.  The  history  of  the  wars,  intrigues, 
and  counter-intrigues  between  the  Europeans  and  the  native 
princes  is  only  important  in  its  results.    It  was  about  this 


228 


TRADING  WITH  ASIA 


time  that  Colonel  Clive  of  the  East  India  Company  vied 
with  the  French  in  extending  the  influence  and  commercial 
supremacy  of  the  English.  In  the  course  of  the  war  be- 
tween Great  Britain  and  France  which  was  ended  in  1763, 
the  French  destroyed  the  English  factory  at  Bender  Abassi 
in  Persia,  took  Fort  Marlborough  near  Bencoolen  in  Su- 
matra, and  Fort  St.  David,  while  the  English  deprived  the 
French  of  all  their  minor  settlements  on  the  coast  of  India 
and  in  1761  took  Pondichery,  where  all  the  French  settlers 
from  the  smaller  posts  had  gathered.  With  the  loss  of  their 
Indian  capital,  French  influence  waned  and  by  the  treaty 
of  peace  they  were  restricted  from  building  any  fortifica- 
tions or  maintaining  any  garrisons  in  any  of  the  returned 
* 'factories"  at  Goromandel,  Malabar,  Orissa,  or  Bengal. 

The  Reorganization  of  the  East  India  Company.— With 
the  destruction  of  French  competition  the  Company  raised 
its  dividend  in  1766  from  six  to  ten  per  cent  and  an 
immense  increase  in  the  value  of  its  stock  took  place.  The 
great  prosperity  of  the  company  now  brought  it  under  the 
surveillance  of  Parliament  and  in  1773  an  act  "regulating 
the  affairs  of  the  East  India  Company"  provided  that  (1) 
no  stockholder  of  less  than  one  thousand  pounds  of  the 
Company's  stock,  held  for  at  least  twelve  months,  was 
henceforth  permitted  to  vote;  (2)  the  Government  of 
Bengal,  Bihar,  and  Orissa  was  vested  in  a  Governor-General 
(Warren  Hastings),  appointed  by  the  Crown;  (3)  the 
Presidencies  of  Madras,  Bombay,  and  Bencoolon  were  ren- 
dered subordinate  to  Bengal;  (4)  a  Supreme  Court  was  es- 
tablished at  Calcutta  consisting  of  a  Chief  Justice  and 
three  other  Judges  all  appointed  by  the  Crown;  (5)  no 
person  in  the  King's  or  Company's  service  was  permitted 
to  accept  any  presents  and  the  Governor-General,  Counsel- 
ors, and  Judges  were  prohibited  from  having  any  concern 
whatsoever  in  trade;  and  (6)  no  person  residing  in  the 
Company's  settlements  was  allowed  to  take  more  than 


HISTORY  OF  BRITISH  INDIA 


229 


twelve  per  cent  for  a  year's  interest  on  money.  By  an- 
other act  Parliament  advanced  the  sum  of  £1,400,000  in 
Exchequer  bills  to  the  Company  at  four  per  cent  and  agreed 
to  forego  a  previous  claim  of  £400,000  a  year  from  the 
territorial  revenue  until  the  debt  should  be  discharged,  at 
the  same  time  restricting  the  Company's  dividend  to  six 
per  cent  until  the  bonded  debt  should  be  reduced  to  £1,- 
500,000.  They  were  required  to  present  a  statement  of 
their  accounts  every  half  year  to  the  Lords  of  the  Treasury 
and  were  restricted  from  accepting  Indian  bills  to  the 
amount  of  more  than  £300,000  in  a  year.  They  were,  more- 
over, required  to  export  a  quantity  of  British  merchandise. 
As  an  interesting  sidelight,  the  licensing  act  passed  by  this 
same  Parliament  permitting  the  Company  to  export  its  sur- 
plus stock  of  tea  to  America,  and  the  fact  that  tea  was  the 
one  article  on  which  Parliament  had  retained  a  duty  as  a 
mark  of  supremacy  when  all  other  duties  on  American  im- 
ports had  been  repealed,  furnished  the  basis  for  the  **  Bos- 
ton Tea  Party"  finally  culminating  in  the  Declaration  of 

Independence. 

The  Weakening  of  the  Company's  Monopoly.— In  1793 
the  exclusive  charter  of  the  Company  was  renewed  by 
Parliament  for  a  period  of  twenty  years  which  further  pro- 
vided that  the  Government  of  India  was  to  be  vested  in  a 
Governor  and  three  Counselors  in  each  of  the  Presidencies 
of  Bengal,  Madras,  and  Bombay,  the  two  latter  being  sub- 
ordinate to  the  former.  These  officials  were  to  be  appointed 
by  the  Directors  of  the  Company  to  which  position  no  per- 
son was  eligible  until  he  had  resided  twelve  years  in 
India  in  the  Company's  service.  In  case  the  Company's 
exclusive  privilege  was  terminated  they  were  still  em- 
powered to  carry  on  free  trade  in  their  corporate  capacity 
in  common  with  other  British  subjects.  The  number  of 
British  subjects  in  India  now  increased  notably  and,  due 
to  the  enormous  amount  of  wealth  accumulated  in  India 


« 


230 


TRADING  WITH  ASIA 


which  they  desired  to  bring  to  England,  an  act  was  passed 
in  1793  providing  for  a  legitimate  channel  of  conveyance 
outside  the  facilities  afforded  by  the  Company.  The  Com- 
pany's civil  servants  in  India  and  also  the  free  merchants 
were  enabled  to  act  as  agents  of  the  Company  and  employ 
its  ships  for  conveying  their  goods  to  India  and  returning 
Indian  merchandise.  In  this  way  the  Company's  monopoly 
was  weakened  by  law  in  favor  of  British  residents  in  India 
and  British  manufacturers  at  liome.  Indeed,  the  purpose 
of  the  law  was  misunderstood  by  the  British  India  resi- 
dents who  built  a  number  of  ships  in  India  in  order  to 
compete  with  the  Company,  but  aside  from  their  use  for 
transporting  Indian  rice  in  a  food  shortage  in  1795,  they 
were  not  permitted  to  engage  in  the  regular  trade.  The 
agitation  for  permission  to  use  these  ships  continued  until, 
in  1803,  the  Company  consented  to  extend  its  own  fleet 
and  permit  individuals  to  ship  their  merchandise  to  such 
an  extent  as  not  to  interfere  with  the  Company's  exports. 

The  Mahratta  Wars.— In  1802  the  Company's  govern- 
ments  in  India  became  engaged  in  war  with  the  Mahratta 
princes  which  terminated  in  a  considerable  addition  of 
territory  to  the  Company's  domain.  The  expense  of  this 
and  previous  conflicts  was  very  great,  necessitating  the  bor- 
rowing of  vast  sums  in  India  on  very  disiidvantageous 
terms,  and  the  withdrawal  of  much  bullion  from  trade.  In 
1808  the  Company's  finances  had  come  to  such  an  em- 
barrassing pass  that  they  petitioned  Parliament  and  ob- 
tained the  payment  of  £1,500,000  claimed  as  expenses  con- 
nected with  political  wars  in  India.  With  this  assistance 
the  Company  regained  its  financial  equilibrium  and  re- 
mained the  one  example  of  successful  monopolistic  enter- 
prise in  the  East. 

The  End  of  the  Company's  Monopoly.— By  1808,  how- 
ever,  conditions  had  changed  considerably  in  the  Eastern 
trade.    Indian  textile  imports  had  fallen  from  £3,000,000 


HISTORY  OF  BRITISH  INDIA 


231 


to  £400,000  and  the  Company's  trade  in  general  was  pretty 
well  disorganized.  Moreover,  the  insistence  of  the  Gover- 
nor-General (Lord  Minto)  on  the  sovereign  rights  of  the 
Company  in  its  relations  with  Persia  brought  up  the  ques- 
tion of  whether  a  sovereign  ought  to  trade.  As  the  result 
of  the  investigation  of  a  select  committee  of  Parliament 
extending  over  four  years,  the  Company  was  notified  that 
on  April  10,  1814,  its  commercial  monopolistic  privileges 
would  cease.  Extended  debate  on  other  prerogatives  of  the 
Company  brought  about  the  acceptance  of  the  principle 
that  the  same  fair  field  should  be  left  to  the  faith  of  the 
ruling  nation  as  was  open  to  the  creeds  of  the  Muslims, 
Hindus,  and  others  and  provision  for  extending  the  work  of 
education  and  the  organization  of  the  field  work  of  the 
Church  of  England  was  begun.  As  for  the  patronage  for- 
merly enjoyed  by  the  Company,  a  system  of  civil  appoint- 
ments by  competitive  examination  was  put  in  its  place. 

The  Sepoy  Mutiny. — The  long  series  of  uprisings  which 
now  followed  culminated  in  the  Sepoy  Revolt  of  1857. 
These  difficulties  were  largely  the  result  of  too  hasty  reform 
legislation  on  the  part  of  the  British  administration.  The 
law  regarding  the  marriage  of  Hindu  widows,  the  curtail- 
ing of  polygamy  among  certain  classes  of  Brahmins,  the 
law  requiring  native  recruits  to  engage  in  overseas  cam- 
paigns, and  a  number  of  other  acts  viewed  lightly  by  the 
British,  made  an  indelible  effect  upon  the  native  mind. 
The  rumor  that  cow's  fat  had  been  used  to  grease  cart- 
ridges, which  the  sepoys  (or  native  troops)  were  required 
to  bite  off  in  the  course  of  their  military  duties,  was  enough 
to  cause  two  regiments  of  Hindu  sepoys  in  Bengal  to  re- 
volt. The  massacre  at  Cawnpore,  the  uprising  in  Oudh, 
and  the  siege  of  Delhi  are  all  stirring  chapters  in  the  Great 
Indian  Mutiny. 

Reforms  of  1859. — The  reform  in  the  British  adminis- 
tration of  India  which  took  place  in  1859  had  the  effect 


f  M   ' 
I'        I 


232 


TRADING  WITH  ASIA 


of  abolishing  the  last  political  prerogatives  of  the  Company 
and  the  new  Government  which  was  organized  resembled 
in  almost  every  respect  the  system  now  in  forc<'.  Together 
with  this  reorganization,  tax  reform  and  financial  reform, 
as  well  as  the  revision  of  the  Indian  Penal  Code  and  the 
opening  of  the  Bast  Indian  railway  marked  the  opening  of 
a  distinct  era  in  Indian  progress. 

Political  Divisions  of  India  under  British  Rule.— At  the 
present  time  India  may  be  divided  politically  into  two  great 
territories,  the  fifteen  provinces  under  British  rule  and 
the  900,  more  or  less,  native  states  under  the  titular  rule 
of  native  princes.  Of  the  provinces,  Madras  with  1,U2,- 
330  square  miles  and  41,405,404  population  is  the  largest  in 
point  of  area  and  the  third  largest  in  population,  followed 
by  Burma  with  230,839  square  miles  and  12,115,217  inhab- 
itants; Bombay  with  123,059  square  miles  and  19,672,642 
population ;  the  United  Provinces  of  Agra  and  Oudh  with 
107,267  square  miles  and  47,182,044  people,  the  most 
thickly  populated  of  all  provinces;  the  central  provinces 
and  Berar  with  99,823  square  miles  and  13,916,308  people ; 
Punjab  with  99,779  square  miles  and  19,974,956  popula- 
tion; Bihar  and  Orissa  with  83,181  square  miles  and  34,- 
490,084  inhabitants;  Bengal  with  only  78,699  square  miles 
but  45,483,077,  or  the  second  largest  population ;  Baluchi- 
stan with  54,228  square  miles  but  only  414,412  people; 
Assam  with  53,015  square  miles  and  6,713,635  people;  the 
Northwest  Province  with  13,418  square  miles  and  7,196,933 
people;  Andamans  and  Nicobais  with  3,143  square  miles 
and  26,459  people ;  Ajmer-Merwara  with  2,711  square  miles 
and  501,395  people ;  and  Coorg  with  1,582  square  miles  and 
174,976  inhabitants.  This  shows  a  total  area  of  1,093,074 
square  miles  and  a  total  population  of  244,267,542  in  India 
directly  under  British  rule. 

The   British   Indian   Government.— The   Secretary  of 
State  for  India  in  the  British  Cabinet  is  at  the  head  of  a 


HISTORY  OF  BRITISH  INDIA 


233 


council  in  London  in  general  charge  of  Indian  affairs.  In 
India  the  authority  of  the  Emperor,  as  the  King  of  Eng- 
land is  called,  is  delegated  to  a  Viceroy,  or  Governor-Gen- 
eral, assisted  by  a  Council,  who  has  supreme  control  over 
the  Indian  Government.  Under  him  are  Departments  of 
Finance,  Commerce,  Home  and  Foreign  Affairs,  Revenue 
and  Agriculture,  Army  Regulation,  Education  and  Public 
Works,  and  the  headquarters  of  the  Government  are  at 
Delhi  in  winter  and  Simla,  in  the  Himalaya  foothills,  in 
summer.  The  Department  of  Commercial  Intelligence 
which  is  maintained  at  Calcutta,  furnishes  useful  informa- 
tion on  business  matters.  The  Government  has  control  of 
the  customs,  post  offices,  telegraphs,  and  the  financial  sys- 
tem of  the  Empire,  owns  some  of  the  principal  railroads, 
and  regulates  others.  The  administrative  details,  such  as 
the  assessment  and  collection  of  revenue,  local  public 
works,  etc.,  are  left  to  the  provincial  governments,  which 
are  divided  into  districts  governed  by  Collectors  and  Chief 
Magistrates  with  administrative  and  judicial  powers. 
Aden,  in  Arabia,  is  under  the  administration  of  the  Bom- 
bay Presidency. 

Political  Divisions  of  Native  States. — The  native  states 
consist  of  the  groups  forming  the  Rajputana  agency,  with 
128,987  square  miles  and  10,530,432  population;  Kashmir 
State,  84,432  square  miles  and  3,158,126  population ;  Hyde- 
rabad State,  82,698  square  miles  and  13,374,676  population ; 
Baluchistan  States,  80,410  square  miles  and  396,432  popu- 
lation ;  the  Central  India  Agency,  77,367  square  miles  and 
9,356,980  population ;  Bombay  States,  63,864  square  miles 
and  7,411,675  population ;  Punjab  States,  36,551  square  miles 
and  4,212,794  population;  the  Central  Provinces  States, 
31,174  square  miles  and  2,117,002  population;  Mysore 
State,  29,475  square  miles  and  5,806,193  population ;  Bihar 
and  Orissa  States,  28,648  square  miles  and  3,945,209  popu- 
lation; the  Northwest  Province  Agencies,  25,500  square 


. 


U  \' 


234 


TRADING  WITH  ASIA 


miles  and  1,622,094  population;  Madras  States,  10,084 
square  miles  and  4,811,841  population;  Assam  State  (Man- 
ipur),  8,456  square  miles  and  346,222  population;  Baroda 
State,  8,182  square  miles  and  2,032,798  population;  Ben- 
gal States,  5,393  square  miles  and  822,565  population ;  the 
United  Provinces  States,  5,079  square  miles  and  832,036 
population ;  and  Sikkim,  2,818  square  miles  and  87,920  pop- 
ulation. This  shows  a  total  of  709,118  square  miles  and 
70,864,995  population  in  the  native  states.  These  states 
are  autonomous  in  their  government,  the  British  Govern- 
ment exercising  a  supervisory  control  through  political 
officers,  or  '*  Residents, ''  who  reside  at  the  seat  of  govern- 
ment of  each.  The  native  states  are  not  allowed  diplo- 
matic relations  with  foreign  countries  except  through  the 
British  Government,  although  many  of  them  have  their 
own  customs  houses  and  collect  duties  on  imported  goods 
in  addition  to  those  collected  by  the  Government  of  India 
at  the  seaports.  Some  have  post  office  systems  for  internal 
mail  service  only,  although  the  Government  of  India  post 
office  must  be  used  for  correspondence  with  other  parts  of 
India  and  abroad.  Currency  for  local  circulation  is  also 
made  in  some  of  the  native  mints  but  the  Indian  rupees 
circulating  throughout  India  are  used  even  in  these  States. 
The  rulers  of  all  the  larger  states  except  the  Nizam  of 
Hyderabad  are  known  as  Maharajas,  and  in  the  smaller 
Hindu  states  as  rajas,  while  in  the  smaller  Mohamjnedan 
states  they  are  known  as  nabobs. 

Ceylon  is  a  crown  colony,  with  an  entirely  separate  ad- 
ministration from  India,  with  a  distinct  system  of  cus- 
toms, posts,  and  telegraphs. 

The  French  colony  of  Pondichery  on  the  southeast  coast 
and  several  small  French  settlements  farther  up  the  coast 
constitute  all  that  remains  in  India  of  French  power  and 
influence.  The  Portuguese  still  retain  the  colony  of  Goa  on 
the  southwest  coast. 


' 


HISTORY  OF  BRITISH  INDIA 


Questions 


236 


1.  Describe  the  first  attempts  at  Indian  trade  by  the  Portugnese. 

2.  What  were  the  causes  of  the  decline  of  Portuguese  commercial 

power  T 

3.  (a)  What  led  the  English  to  seek  direct  trade  with  Indiaf 
(6)  What  privileges  were  granted  the  first  East  India  Com- 
pany? 

4.  Who  were  the  "separate  traders"  and  how  did  their  charter 

differ  from  that  of  the  East  India  Company? 

5.  (a)  What  caused  the  coalition  of  the  Old  Company  and  the 

"separate  traders"? 
(h)  Name  four  of  the  posts  transferred  to  the  New  Company. 

6.  What  led  to  the  regulation  of  the  Company  by  Parliament? 

7.  Discuss  five  important  regulations  imposed  upon  the  Company. 

8.  Why  did  the  Company  agree  to  engage  in  trade  on  behalf 

of  individuals? 

9.  Name  five  important  provinces  of  modem  India  and  describe 

their  government. 
10.  Name  five  native  states  and  discuss  the  limitations  placed  upon 
their  government. 


INDUSTRIES  OF  BRITISH  INDIA 


237 


'  ■( 


li 


CHAPTER  XV 

AGRICULTURE  AND  INDUSTRIES  OP  BRITISH  INDIA 

The  economic  structure  of  Indian  village  life  explains 
India's  reputation  among  financiers  as  a  ''sink  for  silver." 
Mutual  exchange  of  services,  rather  than  the  use  of  money 
as  a  medium  of  exchange,  has  been  the  rule,  and  the  vil- 
lagers, with  no  practical  use  for  gold  and  silver  coins  when 
acquired,  have  hoarded  them  or  melted  them  into  orna- 
ments.   This,  however,  is  only  one  of  the  many  character- 
istic customs  of  Indian  life  which  have  so  vitally  affected 
their  industrial  progress  in  the  past.     The  utter  lack  of 
desire  for  better  living  conditions  both  among  agricultur- 
ists and  artisans  led  them  to  no  competitive  enterprise  and 
no  improvement  in  method.    But  the  village  is  being  trans- 
formed from  a  self-contained  economic  unit  by  the  intro- 
duction of  cheaper  imported  goods,  which  not  only  have 
changed  the  nature  of  the  industries,  but  the  whole  charac- 
ter of  the  village  itself.    The  gravitation  of  the  laborer 
formerly  employed  in  the  rural  industries  or  fields  toward 
the  large  industrial  centers  and  more  profitable  plantation 
work  at  home  and  abroad  have  developed  a  landless  class 
of  transient  rural  labor,  which  is  an  economic  danger, 
especially  in  those  provinces  liable  to  periodic  famines. 
The  increased  demand  for  more  and  better  food,  which  the 
higher  returns  from  this  transient  employment  afford,  has 
exceeded  the  production,  curtailed  by  shortage  of  rural 
labor,  and  a  rise  in  food  prices  has  resulted.    The  present 
problems  in  India,  therefore,  almost  exactly  parallel  the 
problems  in  the  United  States,  with  the  exception  that  in 

India  the  population  is  triple  ours  and  the  area  one-half, 

236 


: 


thus  greatly  aggravating  the  dangerous  phases  of  these 

problems. 
Basic  Considerations  in  Indian  Economics. — ^While  this 

condition  shows  a  tendency  to  spread,  it  is  by  no  means 
universal.  Eighty-five  per  cent  of  the  303,041,179  popu- 
lation is  still  rural  and  72  per  cent  is  agricultural,  and 
although  the  railroad  has  tended  to  destroy  the  self-suffi- 
ciency of  the  village,  long  established  custom  has  kept  many 
artisans  at  home.  Some  of  the  large  industries  and  planta- 
tions find  labor  difficult  to  get,  because  the  factory  hand  is 
still  primarily  an  agriculturist  and  his  temporary  migra- 
tion to  the  city  or  town  does  not  always  mean  his  perma- 
nent settlement  there.  Moreover,  while  coming  more  and 
more  into  use,  money  is  by  no  means  as  universally  used 
as  a  medium  of  exchange  as  is  grain,  the  medium  through 
which  the  landlord  and  laborer  are  still  paid  in  many  vil- 
lages. As  a  result,  prices  in  villages  on  a  commodity  basis 
remain  steady  while  town  and  city  prices  on  a  money  basis 
fluctuate. 

India  is  a  self-supporting,  agricultural  country  except 
when  adverse  weather  conditions  cause  crop  failures.  The 
rainfall  necessary  to  sustain  the  crops  is  brought  each  year 
by  the  monsoon,  or  moisture  laden  wind  from  the  Indian 
Ocean,  and  if  this  is  late  or  of  short  duration  crop  failure 
is  almost  sure  to  result.  In  past  years  such  crop  failure 
meant  famine  and  starvation  for  millions  of  the  population, 
but  now  the  Government,  through  the  encouragement  of 
thrift  and  conservation  in  good  years,  and  the  prohibition 
of  foodstuff  exports  in  poor  years,  is  able  to  prevent  famine. 

The  pre-war  percentages  of  exports  were  raw  materials, 
50  per  cent ;  foodstuffs,  27  per  cent ;  and  manufactures,  23 
per  cent. 

Area  and  Topography.— The  area  of  India  is  1,802,192 
square  miles,  or  a  little  more  than  half  that  of  the  United 
States.    Of  this  area  709,118  square  miles  comprises  native 


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238 


TRADING  WITH  ASIA 


states  which  are  autonomous  as  regards  their  government 
except  that  the  British  Government  exercises  a  certain  su- 
pervision through  British  resident  oflScials.     The  Empire 
is  divided  into  four  well  marked  regions.     The  first  com- 
prises the  peninsula  of  India,  embracing  the  country  that 
lies  south  of  a  line  drawn  from  Kerachi  to  Calcutta,  with  a 
population  of  132,000,000.    The  Ganges  plain,  lying  be- 
tween this  line  and  the  Himalayas,  contains  a  population 
of  162,000,000.     The  Himalayan  country  contains  the  very 
small  population  of  9,000,000,  while  Burma  has  a  popula- 
tion of  12,000,000,  making  the  total  population  of  India 
with  Burma  about  315,000,000.    The  peninsula  region  may 
be  described  as  an  elevated  plateau  bounded  on  the  north 
by  a  line  of  low  hills  and  on  the  south  by  coastal  ranges 
which  overlook  the  sea  from  a  height  varying  from  a  few 
hundred  to  many  thousand  feet.    This  forms  a  gigantic 
and  continuous  sea  wall  pierced  by  no  valleys  of  any  size 
except  for  a  gap  of  200  miles  at  the  extreme  southern  point. 
The  surface  of  the  peninsula  is  uneven  and  rocky  and  not 
more  than  one-third   is  under  cultivation.    The   Ganges 
plain  is  the  most  extensive  area  under  level  cultivation  in 
the  world.     Throughout  this  last  area  the  land  is  composed 
entirely  of  river  sand  and  silt.    Across  this  plain  five  riv- 
ers flow  to  the  west,  forming  what  is  known  as  the  Punjab, 
or  Five  River  Delta,  while  seven  flow  to  the  east  and  form 
the  Ganges  Delta.    At  the  present  time  three-fourths  of 
the  area  is  under  cultivation  and  the  population  is  ex- 
traordinarily dense,  reaching  in  some  places  one  person  to 
the  acre,  and  there  are  no  large  towns,  only  10  per  cent  of 
the  population  being  classed  as  urban.    This  region  sup- 
ports the  largest  population  per  square  mile  in  the  world. 
There  is  little  about  the  Himalayan  country  of  commer- 
cial importance  as  nothing  can  be  grown  without  irriga- 
tion.   At  the  eastern  end  of  the  Himalayas  the  lower  slopes 
are  characterized  by  dense  forests  but,  as  a  whole,  the  coun- 


INDUSTRIES  OF  BRITISH  INDIA 


239 


try  is  a  desert  of  gloomy  rocks  and  barren  valleys  swept  by 
piercing  winds.  The  province  of  Burma  consists  of  the 
valleys  of  three  rivers,  the  principal  of  which  is  the 
Irrawady.  Some  200  miles  above  the  river  mouth  the  val- 
ley opens  to  a  broad  cultivated  plain  which  gradually  ex- 
tends into  a  delta  of  remarkable  fertility. 

Beligion  and  Caste. — ^Religion  plays  an  extremely  impor- 
tant part  in  the  lives  of  the  Indian  people  and  has  a  very 
important  bearing  on  trade  and  industry.  The  Hindus 
regard  the  cow  as  a  sacred  animal  and  abhor  the  use  of 
grease.  It  is  sacreligious  to  kill  a  cow  and  a  good  Hindu 
will  never  touch  any  article  of  commerce  which  has  its 
origin  in  this  manner.  In  some  castes  it  is  not  permitted 
to  touch  an  object  which  is  touched  by  a  foreigner  or  by 
one  of  a  lower  caste.  This  refusal  of  the  natives  to  work 
together  is  largely  responsible  for  the  great  industrial  in- 
efficiency of  the  country.  Happily  these  religious  preju- 
dices are  gradually  disappearing,  although  they  will  exer- 
cise a  potential  influence  for  a  long  time.  There  are  sev- 
eral hundred  dialects  spoken  in  India  but  the  Hindustani 
is  the  language  most  useful  and  the  most  widely  spoken  by 
the  educated  class. 

Principal  Cities. — The  principal  city  of  India  is  Cal- 
cutta, with  a  population  of  1,200,000,  which  is  the  eastern 
port  of  the  Ganges  delta  region.  The  port  extends  10 
miles  along  the  river  and  has  a  fine  system  of  docks.  The 
principal  products  exported  through  Calcutta  are  jute 
and  tea.  It  is  also  a  distributing  center  for  foreign  im- 
ports. 

Bombay  on  the  west  coast,  with  a  population  of  1,000,000, 
is  known  as  the  e:ateway  of  India.  It  is  built  on  a  small 
island  shaped  much  like  Manhattan  Island,  New  York. 
The  export  trade  of  Bombay  is  principally  in  raw  cotton, 
grain,  oil  seeds,  cotton  yarn,  spices,  goat  skins,  and  man- 
ganese ore. 


•:ri 


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240 


TRADING  WITH  ASIA 


Madras,  with  a  population  of  500,000,  is  the  leading 
commercial  center  of  south  India  and  is  located  on  a  sandy 
shore  without  a  natural  harbor.  The  chief  trade  is  in 
exports  of  cotton,  tobacco,  skins,  drugs,  and  spices  and  the 
import  consists  largely  of  manufactured  goods  and  machin- 
ery from  Great  Britain.  Delhi,  the  capital  of  the  British 
India  Empire,  has  a  population  of  250,000.  It  is  the  chief 
distributing  center  for  the  district  between  Calcutta  and 
Bombay  and  a  manufacturing  center  of  jewelry,  lace  work, 
silver,  brass  and  copper  work,  ivory  carving,  and  pottery. 
Cotton  spinning  under  modern  conditions  is  carried  on  both 
in  Delhi  and  Bombay,  which  latter  is  the  center  of  the  in- 
dustry. 

Agriculture  and  Pastoral  Industry 

Wheat. — India,  the  world's  second  largest  wheat  grower, 
produces  annually  about  10,000,000  long  tons  of  wheat, 
which  is  one-tenth  of  the  world's  production.  About  1,- 
300,000  tons  are  exported  in  normal  years,  making  India 
the  fourth  largest  exporter,  although  lack  of  shipping  dur- 
ing the  war  and  crop  failure  (in  1919)  kept  the  exports 
down  to  650,000  tons  in  1916  (years  noted  are  the  fiscal  years 
ending  March  31st) ;  750,000  tons  in  1917;  and  475,000  tons 
in  1919.  In  1918,  1,450,000  tons  were  exported.  Nine- 
tenths  of  the  wheat  exported  is  shipped  from  Karachi,  the 
port  of  the  great  Punjab  wheat  district,  and  the  same  pro- 
portion goes  to  the  British  Empire,  France  and  Italy  being 
the  other  buyers.  Flour  for  domestic  use  is  prepared  al- 
most universally  by  the  janta,  or  hand  mill,  by  which  three 
grades  of  flour  are  made.  The  first  is  made  by  the  regrind- 
ing  of  rich  gluten  wheats  and  is  used  in  confections,  and 
the  other  two  are  made  from  the  flour  separated  in  the 
preparation  of  the  flrst  and  consists  of  a  fine  and  a  coarse 
flour,  the  former  used  by  the  rich  and  the  latter  by  the 
poorer  classes.    The  coarser  grade  is  sometimes  mixed  with 


M 


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INDUSTRIES  OF  BRITISH  INDIA 


241 


barley  and  other  grains.  In  addition  to  the  hand  mills, 
water  power  mills  are  used  in  the  hill  districts,  while  about 
50  modern  flour  mills  are  in  existence,  half  of  them  in  the 
Punjab,  the  others  in  Bengal,  Bombay,  and  the  United 

Provinces. 

Rice. — India  produces  about  30,000,000  tons  of  rice  every 
year,  of  which  only  400,000  tons  are  exported.  The  crude 
methods  still  employed  in  threshing  rice  paddy  by  means 
of  bullock  treading  and  by  beating  the  grain  thus  separated 
on  blocks  of  wood  or  stone  and  the  crude  process  of  husk- 
ing by  means  of  a  beam  balanced  on  a  peg,  produces  a  grade 
of  rice  not  suitable  for  export,  at  a  cost  much  higher  than 
if  machinery  were  used.  Cheap  labor  in  the  agricultural 
districts,  however,  still  prevents  the  introduction  of 
mechanical  husking,  which  in  Burma  has  entirely  super- 
seded the  indigenous  method  to  the  great  improvement  of 
the  product.  One  of  the  great  problems  of  Indian  agricul- 
ture may  be  said  to  be  that  of  diverting  the  preparation  of 
rice  from  the  crude  methods  of  the  village  to  the  more  ad- 
vanced methods  of  mechanical  husking.  This  transform- 
ation, once  begun,  would  open  up  an  immense  market  for 
rice  husking  machinery. 

Millet,  Barley,  Maize,  and  Pulse. — Of  the  minor  food- 
stuffs, millet  is  most  important,  supplying  food  for  the 
poorer  classes  and  feed  for  cattle.  The  average  export  is 
100,000  tons  annually,  largely  to  countries  with  Indian 
populations  accustomed  to  reliance  upon  India  for  food. 
Barley  is  of  minor  importance  as  a  domestic  crop  but  its 
export  averages  225,000  tons  per  year.  Maize  is  exported 
to  the  extent  of  about  25,000  tons  annually.  Barley  and 
maize  are  shipped  chiefly  to  the  United  Kingdom  and  Eu- 
rope. The  average  pre-war  export  of  gram  was  132,000 
tons,  although  in  1919  282,000  tons  were  sent  abroad.  On 
the  other  hand  an  average  pre-war  export  of  lentils  of 
159,000  tons,  which  had  reached  230,000  tons  in  1918,  fell 


242 


TRADING  WITH  ASIA 


I 


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11 


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off  to  30,000  tons  in  1919  because  of  the  unfavorable  crop 
conditions. 

Sugar. — The  most  striking  phenomena  in  the  sugar  pro- 
duction of  India  is  the  continued  increasing  demand  for 
refined  sugar  imported  from  the  Dutch  East  Indies,  and 
the  steady  decline  in  domestic  production.  The  decline  in 
sugar  production  in  the  past  ten  years  has  reached  400,000 
tons,  while  the  imports  during  that  period  liave  averaged 
500,000  tons  annually.  Notwithstanding  this  change,  India 
remains  the  second  largest  producer  of  sugar  cane  in  the 
world,  her  total  production  reaching  3,000,000  tons  an- 
nually, or  34  per  cent  of  the  world's  production.  The  de- 
clining use  of  domestic  sugar  is  said  to  be  due  primarily 
to  the  small  scattered  cane  plantations  preventing  concen- 
tration around  a  central  factory,  coupled  with  the  peculiar 
demand  for  low-grade  sugar  known  as  gur,  which  is  pro- 
duced by  wasteful  methods  but  commands  a  price  out  of  all 
proportion  to  its  refinery  value.  Thus,  while  the  price  of 
gur  had  risen  26  per  cent  in  the  sixteen  years  before  the 
war,  the  price  of  Java  sugar  cultivated  and  refined  under 
modern  methods  had  actually  declined  25  per  cent. 

It  is  doubtful  whether  the  central  factory  system  will 
ever  develop  in  India,  due  to  the  scattered  holdings  of 
individual  farmers  and  the  lack  of  economy  of  cane  produc- 
tion on  large  estates.  The  manufacture  of  refined  sugar 
from  gur  has  been  advanced  as  a  possible  solution  of  the 
sugar  problem  in  India,  but  the  sugar  loss  in  gur  manufac- 
ture and  the  relatively  high  price  of  gur  in  proportion  to 
its  sugar  content  renders  this  project  unsound.  It  is  pos- 
sible, however,  that  a  combination  factory  refining  cane 
for  several  months  and  gur  for  the  rest  of  the  year  could 
be  successfully  established  in  many  districts. 

Sugar  from  the  date  palm  is  produced  to  the  extent  of 
300,000  tons  annually  in  the  United  Provinces.  The  palm 
is  cultivated  on  ground  too  high  for  rice  growing  and  re- 


!l 


INDUSTRIES  OF  BRITISH  INDIA 


243 


quires  seven  years  to  ripen  into  a  juice  producer.  The 
palm  is  then  tapped  every  three  days  during  the  winter 
season  and  from  th^  juice  gur  and  a  fermented  drink 
known  as  toddy  are  produced.  Sugar  is  also  refined  from 
date  palm  gur  and  is  used  chiefly  in  the  manufacture  of 
confectionery. 

Tea,  Coffee,  and  Spices. — India  exports  more  tea  than 
any  other  country  in  the  world,  the  shrub  being  grown  on 
large  plantations  in  Assam,  Bengal,  and  in  Southern  India. 
The  1918  production  was  estimated  at  190,000  tons,  of 
which  162,000  tons  were  exported,  seventy-seven  per  cent  to 
the  United  Kingdom.  Only  five  per  cent  of  the  total  ex- 
ports are  shipped  directly  to  the  United  States,  although 
large  quantities  of  the  Indian  teas  shipped  to  England 
eventually  find  their  way  to  this  country.  Modern  meth- 
ods of  cultivation  on  a  large  scale  have  so  lowered  the  cost 
of  production  of  Indian  tea  that  it  has  superseded  Chinese 
teas  on  the  English  market.  It  is  also  claimed  that  the 
strong  flavor  of  Indian  black  tea  has  destroyed  the  Western 
taste  for  the  more  delicately  flavored  Chinese  product. 

The  production  of  Indian  coffee  is  centered  in  the  Mad- 
ras district  and  the  export  reaches  only  14,000  tons  annu- 
ally, the  value  in  1919  being  $3,800,000. 

India  annually  exports  about  $3,500,000  worth  of  spices, 
the  most  important  being  black  pepper,  of  which  6,900  tons 
are  produced  annually.  Madras  is  the  chief  producing  dis- 
trict, shipping  5,800  tons  of  black  pepper,  4,800  tons  of  red 
pepper,  and  650  tons  of  ginger. 

Jute. — Jute  and  jute  manufactures,  of  which  India  is 
practically  the  world's  only  producer,  represented  27  per 
cent  of  the  total  Indian  exports  in  1919,  as  against  19  per 
cent  in  the  five  years  before  the  war.  Of  this  proportion 
jute  manufactures  accounted  for  22  per  cent  as  against 
nine  per  cent  of  the  five  pre-war  years,  indicating  a  re- 
markable advance  in  the  manufacture  of  jute  bags  and 


244 


TRADING  WITH  ASIA 


cloth.  The  production  of  raw  jute  in  1918  was  1,253,000 
tons,  practically  all  of  which  was  grown  in  Bengal  Prov- 
ince. Raw  jute  exports  in  1919  amounted  to  398,000  tons, 
or  2,230,000  bales  of  400  poimds  each.  The  United  King- 
dom took  56  per  cent  of  the  total  exports,  or  224,000  tons, 
as  against  40  per  cent  in  the  five  pre-war  years.  The  direct 
export  to  the  United  States  fell  off  one-third  to  61,000  tons, 
while  Japan,  Spain,  Prance,  Italy,  and  Brazil  accounted 
for  the  rest  of  the  raw  jute  exports. 

Burlap  bags  and  cloth  were  exported  in  1919  to  the  ex- 
tent of  682,000  tons,  an  increase  of  eight  per  cent  over  the 
pre-war  tonnage,  while  the  value  was  $170,000,000,  an  in- 
crease of  158  per  cent  over  the  pre-war  value.  The  1919 
proportion  of  burlap  bags  was  57  per  cent  of  burlap  cloth, 
42  per  cent,  and  other  jute  manufactures,  one  per  cent. 
Of  the  burlap  bag  exports  23  per  cent  went  to  United 
Kingdom,  14  per  cent  to  Egypt,  12  per  cent  to  Australia, 
eight  per  cent  to  the  United  States,  seven  per  cent  to  Chile, 
and  36  per  cent  to  other  countries  including  Prance,  Cuba, 
Java,  and  the  Argentine.  The  burlap  cloth  exports  includ- 
ing 58  per  cent  to  the  United  States,  12  per  cent  to  Argen- 
tine, 11  per  cent  to  United  Kingdom,  seven  per  cent  to 
Prance,  and  the  balance  of  12  per  cent  to  Australia,  Egypt, 
Chile,  and  other  countries.  Several  factories  with  Ameri- 
can capital  have  been  established  in  Calcutta  for  the  man- 
ufacture of  much  of  the  burlap  shipped  to  the  United 
States.  Seventy-six  mills  with  40,000  looms  and  824,000 
spindles  operated  by  50  companies,  four  of  which  are  pri- 
vate concerns,  manufacture  the  jute  for  export. 

Cotton  and  Cotton  Goods. — India  normally  produces 
4,000,000  bales  of  400  pounds  each  of  raw  cotton  annually 
and  is  the  world's  second  largest  producer.  The  1919  yield 
was  slightly  below  normal,  about  3,670,000  bales  being  pro- 
duced, of  which  1,030,000  bales  were  exported  at  a  total 
value  of  $100,575,000.    This  was  just  50  per  cent  of  the 


INDUSTRIES  OF  BRITISH  INDIA 


245 


exports  of  1918  and  57  per  cent  of  the  five  pre-war  years, 
the  decrease  being  due  to  shipping  difficulties  and  industrial 
growth  at  home.  Of  these  exports  Japan  took  76  per  cent, 
Italy  11  per  cent,  the  British  Empire  nine  per  cent,  and  all 

others  four  per  cent. 

The  production  of  cotton  yam  was  615,000,000  pounds  in 
1919  a  seven  per  cent  decrease  compared  with  the  preced- 
ing year,  and  five  per  cent  under  the  five-year  pre-war 
average.  Of  this  amount  the  exports  were  64,000,000 
pounds,  valued  at  $23,500,000,  47  per  cent  below  the  quan- 
tity of  the  year  before,  and  67  per  cent  below  the  pre-war 
average.  Nearly  all  of  these  exports  consisted  of  one  to 
20  counts  and  China  took  80  per  cent,  or  less  than  half  the 
amount  taken  in  1918.  The  decrease  in  exports  to  China 
was  due  largely  to  competition  with  cheap  Japanese  yams. 
Egypt,  Straits  Settlements,  Persia,  Siam,  the  United  King- 
dom, Aden,  and  Mesopotamia  were  the  other  buyers. 

The  exports  of  piece  goods  in  1919  amounted  to  149,000,- 
000  yards  valued  at  $21,000,000,  62  per  cent  of  which  were 
colored,  35  per  cent  gray,  and  three  per  cent  white.  The 
exports  were  only  17  per  cent  of  the  imports  of  piece 
goods,  but  were  65  per  cent  above  the  pre-war  average 

exports. 

The  cotton  which  India  produces  is  of  the  short-staple 
variety  and  can  consequently  only  be  utilized  in  the  pro- 
duction of  very  low-grade  yarn  and  piece  goods.  Por  this 
reason  the  greater  portion  of  it  is  utilized  in  Japan.  It  is 
doubtful  whether  the  soil  and  climate  of  India  will  ever 
permit  the  successful  production  of  such  grades  as  Ameri- 
can upland  cotton,  which  is  being  grown  so  widely  in 

China. 

Silk.— A  general  decline  in  silk  rearing  throughout  India 
has  taken  place  within  recent  years  due  primarily  to  the 
tukra  disease  in  the  bush  mulberries  and  pehrine,  muscar- 
dine,  Flacherie,  and  grasserie  diseases  among  the  worms. 


246 


TRADING  WITH  ASIA 


INDUSTRIES  OF  BRITISH  INDIA 


247 


II 


Wliile  the  eradication  of  these  diseases  is  comparatively 
simple,  it  requires  scientific  and  painstaking  attention 
which  the  middle-class  silk  breeder  is  unwilling  to  give. 
The  discouragement  to  worm  breeding  has  in  turn  reacted 
upon  mulberry  growing  and  other  crops  have  been  found 
more  profitable  than  mulberry  raising.  Microscopic  selec- 
tion of  seed  by  the  Pasteur  method  has  been  found  most 
successful  in  eradicating  pebrine,  which  is  by  far  the  most 
serious  and  prevalent  disease,  and  this  has  been  put  into 
practice  on  a  large  scale  in  the  nurseries  of  the  Bengal 
Government  Silk  Committee.  An  adequate  supply  of  pure 
seed  cocoons  and  properly  constructed  rearing  houses  for 
protection  against  the  silk-worm  fly  known  as  muscardine, 
grasserie,  and  Flacherie,  are  suggested  reforms  which 
the  provincial  governments  are  being  urged  to  adopt. 

The  apathetic  attitude  of  the  Government  toward  these 
reforms  is  probably  due  to  the  declining  exports  which 
have  been  brought  about  by  severe  competition  of  Italian, 
Chinese,  and  Japanese  silks.  Crude  methods  of  reeling 
which  cannot  compete  with  the  more  advanced  Japanese 
methods,  a  backward  system  of  crossing  affecting  the  qual- 
ity of  the  product,  unscientific  boiling  of  the  cocoon,  and 
failure  to  re-reel  exported  silks,  have,  perhaps,  more  seri- 
ously curtailed  Indian  silk  exports  than  any  other  factors. 
On  the  other  hand  the  indigenous  methods  are  cheaper  and 
if  the  native  product  were  rewound  it  would  probably  find 
a  ready  market  in  Europe.  The  present  production  of  raw 
silk  is  about  500,000  pounds  and  of  silk  cloth  about  360,000 
yards.  In  1919  France  took  $1,000,000  worth  of  raw  silk, 
or  twice  the  value  of  her  1918  purchases,  while  the  United 
Kingdom  bought  about  $950,000  worth,  a  slight  decline 
from  her  1918  purchases.  Most  of  the  silk  cloth  is  made 
in  Benares,  Nagpur,  Mirzapur,  and  Agra  from  silk  pro- 
duced in  the  Maldah  district  of  Bengal,  and  sold  locally. 
Silk  from  the  tassar  worm,  or  wild  silk  worm,  from  which 


eri  cloth  is  produced,  furnishes  livelihood  for  some  45,000 
persons  in  Bengal  and  the  Central  Provinces.  The  worm 
feeds  upon  the  castor-bean  plant  which  grows  almost  like 
a  weed  in  many  districts.  The  worm  has  been  domesti- 
cated so  that  it  closes  regularly  in  May  and  June.  There 
is  little  foreign  demand  for  the  product  and  the  relatively 
low  price  has  led  to  the  decline  of  the  industry.  The 
climate  of  Assam  is  admirably  adapted  to  the  growth  of 
this  silk  and  as  the  worm  is  prolific,  the  labor  required 
in  its  rearing  slight,  and  skilful  reeling  unnecessary  be- 
cause the  pierced  shell  may  be  readily  sold  abroad,  an 
effort  is  being  made  to  encourage  the  industry.  The  co- 
coons are  simply  combed  and  carded  like  wool  and  no  at- 
tempt to  unreel  the  single  strands  is  made. 

Oilseeds.— In  1919  India  exported  487,700  tons  of  oil- 
seeds valued  at  $36,400,000,  and  this,  while  an  increase  of 
seven  per  cent  in  quantity  and  36  per  cent  in  value  over 
the  preceding  year,  was  only  one-third  the  pre-war  average. 
The  United  Kingdom  took  73  per  cent  of  this  trade,  France, 
10  per  cent,  Italy,  five  per  cent,  the  United  States,  two  per 
cent,  and  all  others,  10  per  cent.  Before  the  war  a  third 
of  the  export  had  gone  each  to  England  and  France  and  a 
sixth  to  Belgium  and  Germany.  Of  the  seeds  exported, 
46  per  cent  originated  in  Bombay,  30  per  cent  in  Bengal, 
10  per  cent  in  Sind,  and  five  per  cent  in  Madras. 

Linseed,  produced  from  flax  grown  exclusively  for  the 
seed,  showed  a  total  yield  of  about  450,000  tons  in  1918,  of 
which  158,000  tons  were  exported.  In  1919  this  had  in- 
creased to  292,000  tons.  Bengal  and  the  Central  Provinces 
are  the  principal  centers  of  cultivation.  This  crop  is  the 
most  important  export  oilseed  crop,  very  little  being  used 
domestically.  About  80  per  cent  of  the  1919  linseed  ex- 
ports went  to  the  United  Kingdom,  Australia  took  seven 
per  cent,  and  Italy  and  the  United  States  most  of  the  re- 
mainder.   The  United  Kingdom's  decreased  imports  of  lin- 


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i 


seed  from  the  Argentine  in  1917  and  1918  were  largely  re- 
sponsible for  this  increased  import  from  India. 

Rape  and  mustard  seed  are  much  more  universally  used 
domestically,  the  former  to  anoint  the  body.  Mustard  is 
grown  most  extensively  in  Bengal  and  Assam  while  rape  is 
produced  chiefly  in  upper  India.  Calcutta  is  the  chief  oil 
mill  center  of  these  oils,  which  are  crushed  from  seed 
brought  in  from  the  United  Provinces,  the  oil  being  shipped 
to  Eastern  Bengal  and  Assam.  The  1918  yield  of  rape  and 
mustard  seed  was  1,111,000  tons  of  which  only  66,000  was 
exported.  In  1919  these  shipments  incr<>ased  to  80,000 
tons,  the  United  Kingdom,  France,  and  Italy  being  the 
chief  purchasers. 

Cottonseed  is  an  important  by-product  of  the  cotton 
growing  industry  and  about  300,000  tons  are  produced 
annually,  only  1,450  tons  being  exported  in  1919.  This 
seed  is  used  largely  as  a  cattle  food  at  home,  the  exports 
varying  as  good  or  poor  monsoons  affect  the  cotton  crop. 

Castor  seeds  were  exported  to  the  amount  of  82,000  tons 
m  1919,  nearly  80  per  cent  of  which  went  to  the  United 
Kingdom.  The  export  of  these  seeds  has  steadily  decreased 
m  recent  years  with  the  growth  of  the  castor  oil  manufac- 
turing industry  in  India. 

Peanut  exports  fell  from  a  pre-war  average  of  212  000 
tons  and  115,000  tons  in  1918  to  17,000  tons  in  1919. 
Forty  per  cent  of  these  exports  went  to  the  Straits  Set- 
tlements for  transhipment  to  Hongkong  and  the  United 
States,  while  France  took  15  per  cent  and  the  United 
Kingdom  only  three  per  cent.  In  1918  the  production  of 
peanuts  was  940,000  tons,  or  eight  times  the  export,  and 
the  sharp  decline  in  exports  in  1919  was  due  to  poor  crop 
conditions  which  curtailed  the  exportable  surplus. 

Copra  exports  in  1918  amounted  to  6,600  tons  but  fell  to 

450  tons  in  1919,  because  of  unfavorable  crop  conditions. 

The  sesame  seed  crop  amounted  to  only  386,000  tons  in 


249 


1918,  a  decrease  of  35  per  cent  from  1917  and  13  per  cent 
from  the  pre-war  average.  The  1918  exports  of  18,000  tons 
feU  to  2,400  tons  in  1919. 

Vegetable  Oils. — The  manufacture  of  vegetable  oil  has 
been  a  very  important  village  industry  in  India  for  centuries. 
The  introduction  of  cheaper  kerosene  has  reduced  the  de- 
mand for  coconut  and  castor  oil,  both  of  which  had  long  been 
used  as  illuminants.     The  former  is  still  used  for  cooking 
purposes  and  for  soap  making,  but  the  chief  demand  for 
the  latter  is  now  for  export.    Til  oil  is  perhaps  the  most 
popular  oil  for  cooking  purposes.    Vegetable  oil  is  made  in 
almost  every  village  by  the  old  native  method,  consisting  of 
a  wooden  pestle  working  in  a  cavity  of  a  wooden  block 
sunk  into  the  ground  and  shaped  like  an  inverted  cone. 
The  motive  power  is  furnished  by  bullocks  and  two  press- 
ings  do  not  suffice  to  abstract  the  oil  efficiently.     This 
native  method  is  much  more  expensive  than  modern  crush- 
ing methods  employed  in  Europe  and  as  a  result  India  re- 
imports much  vegetable  oil  exported  in  the  seed  to  Europe. 
The  loss  of  the  oil  cake  to  India  as  a  fertilizer  as  well  as 
the  transfer  of  a  lucrative  industry  to  Europe  have  both 
been  advanced  as  reasons  why  the  vegetable  oil  industry 
should  be  established  on  modern  lines  in  India.     Popular 
prejudice  against  the  supposedly  discolored  oil  produced  by 
machinery,  however,  and  the  influence  of  custom  have  dis- 
couraged the  erection  of  modern  oil  mills,  although  their 
number  is  growing.     There  would  seem  to  be  a  market  for  a 
modem  hand  press  crushing  about  a  third  of  a  ton  of  seed 
a  day,  which  would  cost  about  $250  and  be  within  reach  of 
the  small  capitalist. 

Coconut  oil  produced  largely  from  Ceylon  copra  was 
exported  to  the  extent  of  7,000,000  gallons  in  1919  as 
against  3,000,000  gallons  in  1918  and  1,750,000  before  the 
war.  The  United  Kingdom  took  80  per  cent  and  the  bal- 
ance went  to  Italy  and  Egypt. 


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Linseed  oil  exports  of  1,675,000  gallons  in  1919  were 
three  times  those  of  1918  and  went  principally  to  Italy, 
New  Zealand,  Australia,  and  South  Africa. 

Castor  oil  exports  in  1919  were  1,658,000  gallons, 
showing  a  decrease  of  20  per  cent  as  against  1918.  The 
United  Kingdom  and  Italy  took  92  per  cent  of  the  1919 
exports. 

Hides  and  Skins.— Possessing  132,000,000  cattle,  most 
of  which  are  work  animals,  few  being  slaughtered  for  food 
because  of  the  religious  prohibition  against  meat  eating, 
India  has  become  a  large  producer  of  hides  and  the  tanning 
and  leather  industry  has  attained  a  very  important  place 
in  Indian  industry.  The  hide  and  skin  trade  which  had 
been  largely  controlled  by  the  Germans  before  the  war  was 
diverted  to  the  United  States  in  1917,  when  36  per  cent  of 
the  36,800  ton  raw-hide  trade  was  with  this  country.  In 
1919  this  had  fallen  to  19,100  tons,  74  per  cent  of  which 
were  cowhides  for  the  United  Kingdom  and  Italy.  The 
tanned  hide  export  which  reached  20,600  tons  in  1917  was 
all  but  2,000  tons  for  British  Government  account,  due  to 
restrictions  imposed  by  the  Government  on  tanned  hide 
exports  for  private  account.  In  1918,  17,300  tons  of 
tanned  hides  were  exported.  Due  to  the  increase  of  tan- 
ning in  India  during  1918,  aided  by  the  Government  pro- 
hibition on  certain  classes  of  raw-hide  exports  until  April, 
1919,  the  tanned  hide  exports  reached  25,500  tons  in  1919, 
an  increase  of  39  per  cent  over  1918.  The  entire  quantity 
of  these  tanned  hides  was  shipped  to  the  United  Kingdom, 
and  98  per  cent  were  tanned  cowhides. 

Kaw-skin  exports  reached  25,000  tons  in  1919,  a  12  per 
cent  increase  over  1918,  and  a  decrease  of  3,200  tong  as 
against  1917  shipments.  Three-fourths  of  the  1919  ship- 
ments went  to  the  United  States  and  85  per  cent  of  the 
total  shipments  were  raw  goat  skins.  Tanned  skins  were 
exported  to  the  amount  of  3,000  tons,  an  increase  of  75  per 


cent  over  1918,  and  a  decline  of  3,300  tons  from  1917 
exports.  Seventy-five  per  cent  of  the  exports  were  to  the 
United  Kingdom,  and  the  remainder  went  to  the  United 
States  and  Japan. 

The  modern  tanneries  of  India  are  located  in  Madras  and 
Bombay  and  there  is  a  heavy  rail  movement  of  raw  hides 
into  these  Presidencies  from  Northern  India  each  year. 
The  indigenous  industry  is  found  all  over  India  and  is 
carried  on  exclusively  by  the  low-caste  chamars  and  muchis, 
who  are  shunned  and  avoided  by  all  other  castes  because  of 
their  profession.  The  defects  in  the  native  tanning  meth- 
ods are  many  and  serious,  consisting  of  over  liming,  anti- 
quated fleshing  and  hair  removing,  insuflBcient  bathing,  im- 
properly graduated  tanning  periods,  and  inadequate  curry- 
ing. 

European  patterns  in  shoes  are  in  greatest  demand  and 
the  shoemaking  industry  as  well  as  the  native  tanning  in- 
dustry is  controlled  by  the  miichi,  who  often  purchases  the 
better  tanned  leathers  from  Calcutta,  Agra,  and  Cawnpore 
for  shoemaking.  The  shop  keepers  often  finance  the  house- 
hold manufacture  of  shoes  by  the  muchi,  but  the  exploita- 
tion is  usually  so  great  that  many  of  the  native  tanners  and 
shoemakers  are  now  organizing  along  cooperative  lines, 
whereby  credit  is  more  cheaply  obtained  and  better  tools 
can  be  purchased.  The  basic  caste  organization  so  strong 
in  this  and  other  industries  lends  itself  very  readily  to  the 
cooperative  movement. 

Wool  and  Carpets.— Raw-wool  shipments  in  1919 
amounted  to  23,500  tons,  against  22,500  tons  in  1918,  and 
22,000  tons  in  1917.  In  addition  to  these  exports  a  small 
amount  of  wool  is  brought  to  Indian  ports  from  Afghan- 
istan and  Tibet  and  shipped  abroad.  The  United  King- 
dom takes  all  of  the  Indian  wool  exported,  74  pei*  cent  of 
the  1919  export  being  shipped  from  Bombay  and  24  per 
cent  from  Karachi. 


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i  II 


m 

II 


Woolen  carpets  and  rugs  to  the  value  of  $485,000  havt 
been  shipped  abroad  annually  in  the  past  two  years. 

Indigo.— The  production  of  indigo  dropped  from  4,000 
tons  in  1918  to  2,000  tons  in  1919,  although  the  1919*  ex- 
ports of  1,500  tons,  valued  at  $4,000,000,  were  five  per 
cent  over  those  of  1918  and  112  per  cent  above  the  pre-war 
average.  Japan  took  about  40  per  cent  of  India's  indigo 
exports,  the  United  States,  20  per  cent,  and  the  United 
Kingdom,  15  per  cent.  The  return  of  aniline  dyes  to  Brit- 
ish markets  accounted  for  much  of  the  slack  demand  from 
that  source  and  this  in  turn  affected  the  area  planted  in 
indigo  because  of  the  drop  in  price  of  the  natural  dye  due 
to  competition  with  the  artificial  product. 

Other  Agricultural  Products.— Opium  exports  in  1919 
were  $2,300,000  over  the  $7,800,000  exports  of  1918,  but 
considerably  under  the  pre-war  average  export  of  $32,:{00,- 
000.     Of  the  total  exports  in  1919,  $2,100,000  went  to 
Japan.    Bettter  shipping  facilities  account  somewhat  for 
the  large  shipments  in  1919,  although  lax  control  over 
smuggling  into  China  accounts  in  no  small  degree  for  the 
increased  foreign  demand  for  Indian  opium,  large  quanti- 
ties finding  their  way  to  China  by  way  of  other  countries. 
Raw-hide  exports  almost  doubled  in  value  in  1919,  the 
total  being  $4,700,000.    Nearly  $4,000,000  of  these  exports 
were  shipped  to  the  United  Kingdom. 

Mines  and  Minerals 

Coal.— The  production  of  coal  in  India  ha«  steadily  risen 
from  an  average  annual  output  of  16,600,000  tons  from 
1913  to  1916  to  18,200,000  tons  in  1917  and  20,700,000  tons 
in  1918.  The  quality  is  poor,  running  from  14  per  cent  to 
20  per  cent  ash  and,  because  of  transportation  difficulties, 
Welsh  coal  has  been  found  cheaper  in  Karacthi  and  Bombay 
than  the  home  product.  The  need  of  a  higher  quality  coal 
is  also  a  factor  in  the  coal  import  trade  which  averages 


34,000  tons  annually.  The  exports  of  coal  dropped  to 
143,600  tons  in  1919  from  255,900  tons  during  the  previous 
year  and  a  pre-war  average  export  of  823,800  tons.  In 
addition  to  these  exports,  1,490,000  tons  of  bunker  coal  left 
India  in  1919  and  a  considerable  tonnage  on  Government 

account. 

Manganese  Ore. — India  is  the  largest  producer  of  man- 
ganese in  the  world  despite  the  fall  in  production  from 
828,000  tons  in  1913  to  641,000  tons  in  1917.  Magnesite 
production  has  likewise  fallen  from  17,500  tons  in  1916  to 
7,400  tons  in  1917.  The  1919  exports  of  385,400  tons  of 
manganese  ore  valued  at  $2,500,000  was  a  decrease  of  11 
per  cent  from  1918.  The  United  Kingdom  took  77  per 
cent  of  the  exports,  the  balance  going  to  France,  Japan,  the 
United  States,  Belgium,  and  Italy.  Ferro-manganese 
amounting  to  10,900  tons  was  exported  in  1919,  chiefly 
from  Bengal. 

Mica. — With  an  annual  average  production  of  2,200  tons 
India  is  the  chief  source  of  sheet  mica  in  the  world.  The 
1919  exports  of  2,800  tons,  valued  at  $3,000,000,  were  re- 
stricted to  the  United  Kingdom  and  these  showed  a  decline 
of  15  per  cent  compared  with  1918  exports,  but  an  increase 
of  14  per  cent  over  the  pre-war  average. 

Iron  and  Steel.— Iron-ore  production  in  1916  was  142,600 
tons,  while  in  1918  the  output  of  the  two  principal  iron 
works,  the  Tata  Iron  and  Steel  Works  and  the  Bengal  Iron 
and  Steel  Works,  was  731,200  tons  and  in  1919,  781,100 
tons ;  the  production  of  the  latter  year  consisting  of  262,600 
tons  of  pig  iron,  182,800  tons  of  steel,  and  160,500  tons  of 
iron  blooms  and  billets,  the  balance  of  175,200  tons  being 
miscellaneous  products.  Most  of  this  production  was  used 
domestically. 

The  100,000  tons  of  chromite  produced  in  1916  was 
almost  four  times  the  1915  output.  In  1919  39,400  tons  of 
chrome  ore  were  shipped  abroad. 


>.   I 


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I'  I 


Other  Minerals.-— "With  an  annual  production  of  18,000 
tons  of  saltpeter  India  possesses  a  practical  world  monop- 
oly of  this  mineral.  The  1919  exports  were  chiefly  to  the 
United  Kingdom,  $2,000,000  worth,  and  to  the  United 
States,  $600,000  worth. 

Of  the  4,870  tons  of  wolfram  ore,  valued  at  $3,600,000, 
shipped  entirely  to  the  United  Kingdom  in  1919,  all  but  71 
tons  were  produced  in  Burma  but  shipped  abroad  through 
Indian  ports. 

Mysore  is  the  principal  location  of  Indian  gold  plac- 
ers which  produce  about  600,000  ounces  of  gold  an- 
nually. 

Other  minerals  produced  in  lesser  quantities  are  anti- 
mony, cobalt,  graphite,  corondum,  bauxite,  pitchblende, 
magnesia,  copper,  lead,  and  monazite. 

Forests  and  Forest  PRODUcra 

Shellac. — Lac,  a  secretion  from  wounded  branches  of  the 
kusumb,  phalsa,  and  laer  trees  forming  an  incrustation 
about  certain  insects,  is  now  sought  more  for  its  resinous 
qualities,  which  develop  after  the  larvae  have  swarmed, 
than  for  the  red  dye  properties,  which  it  possesses  before 
the  larvae  swarm.  After  incrustation  this  excretion  is 
known  as  the  shell-lac.  The  larvae  first  produce  on  the 
twigs  the  red  dye  lac,  and  on  swarming  crawl  to  new  wood 
and  remain  on  it,  sucking  the  juice  until  they  are  entirely 
enveloped  in  the  stick  lac.  For  this  purpose,  sticks  inocu- 
lated by  tying  them  with  a  bundle  of  grass  to  different  parts 
of  the  tree,  are  placed  conveniently  so  that  the  swarming 
may  take  place  on  them,  the  resinous  lac  so  produced  being 
known  as  stick  lac.  As  the  stick  lac  is  now  sought  in  pref- 
erence to  the  dye  or  shell-lac,  the  collection  is  very  gen- 
erally delayed  until  the  swarming  has  taken  place,  so  as 
to  obviate  the  necessity  of  removing  the  dye  and  thus  in- 
juring the  resinous  qualities  of  the  shell-lac. 


"VI 


Lac  serves  a  multitude  of  useful  purposes  in  India  where 
it  takes  the  place  of  putty  in  carpentry  and  woodwork,  and 
serves  the  same  as  varnish  and  paint.  Colored  ornamenta- 
tions of  lac  are  made  on  copper,  glass,  and  ivory  wares,  and 
it  is  used  as  a. cement  and  a  glue  in  many  trades.  In  Eu- 
rope and  America  lac  is  the  basis  of  many  varnishes  and 
is  the  chief  ingredient  of  sealing  wax.  It  is  used  as  a 
stiffening  material  for  hats,  in  the  preparation  of  litho- 
graphic ink,  and  in  the  manufacture  of  phonograph  records, 
and  electrical  insulating  material. 

India  enjoys  a  virtual  monopoly  of  the  world's  lac  pro- 
duction, but  the  export  has  steadily  declined  from  3,400 
tons  in  1917,  to  2,800  tons  in  1918  and  2,200  tons  in  1919, 
the  value  of  the  latter  year's  exports  reaching  $9,000,000. 
The  United  States  took  44  per  cent  of  the  1919  exports,  the 
United  Kingdom,  29  per  cent,  Japan,  eight  per  cent,  the 
Philippines,  five  per  cent,  and  other  countries,  14  per  cent. 

Other  Forest  Products. — Teak,  sal,  and  deodar  timber 
are  the  three  principal  timber  products  of  India.  About 
2,400  tons  of  rosin  were  produced  in  1917,  over  twice  the 
production  of  1913.  Turpentine  production  increased  from 
59,000  gallons  in  1913  to  125,000  gallons  in  1917.  Rubber 
produced  chiefly  in  Assam  and  Madras  reached  an  export 
value  of  $8,000,000  in  1919,  the  average  pre-war  export 
value  being  only  $1,300,000.  Due  to  shipping  difficulties 
during  the  war  large  stocks  had  accumulated,  resulting  in 
a  very  low  price.  The  1919  shipments,  therefore,  represent 
considerably  more  than  the  average  production  for  export. 

Fisheries. — It  is  estimated  that  90  per  cent  of  the  popula- 
tion of  western  India  is  dependent  upon  fish  for  sustenance, 
but  lacking  modem  methods  of  catching,  curing,  and  pre- 
serving the  fish  which  abound  in  the  inlets  and  rivers,  much 
of  this  food  remains  unavailable  and  little  is  exported. 
Artificial  hatching,  such  as  is  practiced  in  Europe  and 
Japan,  for  restocking  the  streams  which  have  become  ex- 


256 


TRADING  WITH  ASIA 


*  \ 


hausted,  is  being  undertaken  by  the  Bengal  Government. 
The  fish  supply  is  decreasing  yearly  due  to  the  passing  of 
the  supplementary  occupation  of  boatmen  for  the  fishermen, 
caused  by  the  increasing  number  of  river  steamers  and 
railways.  The  exorbitant  profits  demanded  by  the  middle- 
men are  also  discouraging  to  the  fishermen. 

Questions 

1.  How  has  Indian  village  life  affected  the  demand  for  silver  T 

2.  (a)  What  is  India's  position  as  a  wheat  exi)orterf 
(6)  Describe  the  native  manufacture  of  flour. 

3.  Why  does  Indian  rice  fail  to  find  a  market  abroad  ? 

4.  Discuss  India's  sugar  production  and  import  trade  and  giv« 

suggested  remedies  for  present  situation. 
6.  Describe  India's  position  in  jute  production. 

6.  Why  does  India's  cotton  go  to  Japan? 

7.  Give  the  reasons  for  the  decline  in  Indian  silk  culture. 

8.  Name  three  kinds  of  oilseeds  shipped  from  India  and  the  prin- 

cipal destination  of  each. 

9.  How  does  India  suffer  by  shipping  oilseeds  to  Europe? 
10.  Describe  the  production  of  lac. 


CHAPTER  XVI 

lliBKET    ANALYSIS    OF    BRITISH    INDIA 

India's  Trade  Balance. — India's  normal  excess  of  ex- 
ports, in  the  five  years  before  the  war,  was  50  per  cent  of 
her  imports,  but  in  1915  this  dropped  to  27  per  cent,  in- 
creasing in  1916  to  46  per  cent  and  in  1917  to  84  per  cent. 
This  marked  the  peak  of  Indian  production  for  war  needs, 
and  in  1918  excess  of  exports  was  only  55  per  cent  of  the 
imports,  while  in  1919  the  $776,400,000  export  trade  was 
just  41  per  cent  in  excess  of  the  $548,400,000  import  trade. 
The  value  of  the  1919  export  trade  was  $64,000,000  more 
than  the  pre-war  average  and  $76,000,000  more  than  the 
average  for  the  war  period,  while  the  import  values  for 
1919  were  $75,000,000  over  the  pre-war  average  and  $69,- 
000,000  in  excess  of  the  average  imports  during  the  war. 
These  figures  denote  a  general  rise  in  prices  and  indicate 
little,  if  any,  increased  tonnage  in  the  goods  brought  in  or 
shipped  during  1919.     This  constantly  cumulating  credit 
in  favor  of  India  has  had  to  be  met  by  corresponding  ship- 
ments of  gold  and  silver  to  India,  and  when  the  amount  to 
India's  credit  reached  $384,000,000  in  a  single  year,  as  it 
did  in  1917,  the  demand  for  silver  from  this  source,  from 
China,  and  by  soldiers  in  the  field,  together  with  the  de- 
creasing supply  from  war-torn  Mexico,  caused  an  inordinate 
rise  in  the  price  of  that  metal.    This  rise  in  the  virtual 
medium  of  Indian  exchange  automatically  checked  exports 
in  1918  and  stimulated  imports,  cutting  the  excess  to  $269,- 
000,000,  and  this  was  further  reduced  to  $228,000,000  in 
1919.    Were  the  standard  of  living  raised  in  India  and  the 

wants  of  the  people  increased,  the  resulting  increase  in  im- 

257 


258 


TRADING  WITH  ASIA 


ports  would  establish  a  more  equitable  balance  of  trade, 
which  would  not  only  .prevent  a  heavy  drain  on  metal  re- 
serves of  the  West,  but  prove  an  ultimate  stimulus  to  trade 
as  a  whole  by  furnishing  outbound  cargo  from  those  coun- 
tries whose  purchases  of  Indian  produce  are  now  limited 
by  high  freight  rates  due  to  an  excessive  carriage  of  exports 
from  India  with  little  return  cargo.  Moreover,  with  a 
lighter  demand  for  silver,  resulting  from  a  more  balanced 
trade,  India  would  receive  implements  and  goods  for  her 
products  instead  of  a  comparatively  useless  metal  which 
ultimately  disappears  from  circulation  in  the  form  of  orna- 
ments and  jewelry  and  is  of  no  real  economic  benefit  to  the 
country.  The  fallacy  of  the  supposed  benefits  of  a  favor- 
able balance  of  trade  is  nowhere  better  illustrated  than  by 
India's  constant  struggle  to  produce  by  antiquated  meth- 
ods food  and  raw  materials  for  western  consumption,  re- 
ceiving in  return  only  two-thirds  as  much  in  goods  of  eco- 
nomic value  and  tangible  benefit.^ 

The  Chief  Suppliers  of  Indian  Markets.— The  fifteen 
principal  items  of  India's  import  trade  are,  with  one  or  two 
exceptions,  all  such  articles  as  are  manufactured  on  a  large 
scale  in  the  United  States,  but  less  than  10  per  cent  of 
India's  purchases  in  1919  were  made  in  this  country,  as 
against  eight  per  cent  in  1918.  The  United  Kingdom  sold 
India  45  per  cent  of  her  imports  in  1919  and  other  parts  of 
the  British  Empire  furnished  13  per  cent  additional,  in  all 
an  increase  of  six  per  cent  over  the  British  Empire's  share 
in  the  Indian  import  trade  in  1918.  The  most  phenomenal 
increase  was  Japan's  shipments  to  India;  they  rose  from 
12  per  cent  of  India's  import  trade  in  1918  to  20  per  cent 
of  the  1919  trade.    Java's  exports  to  India,  consisting  al- 

1  The  recent  depression  has  witnessed  a  decided  falling  oflf  of  Indian 
exports  and  the  establishment  of  an  unfavorable  balance  of  trade,  to- 
gether with  a  depression  in  the  value  of  the  rupee.  Tliis  violent 
fluctuation  has  b€«n  more  serious  than  the  normal  condition  outlined 
above. 


MARKET  ANALYSIS  OF  BRITISH  INDIA        259 

most  entirely  of  sugar,  constituted  seven  per  cent  of  the 
latter 's  1919  import  trade,  while  the  remaining  five  per 
cent  was  divided  between  China,  France,  Persia,  Italy,  Nor- 
way, Sweden,  and  other  countries. 

Cotton  Piece  Goods. — Notwithstanding  India's  increas- 
ing importance  as  a  cotton  goods  manufacturer,  cotton 
piece  goods  still  account  for  30  per  cent  of  her  total  imports, 
and  the  1919  value  of  $167,700,000,  while  slightly  under 
1918  figures,  shows  an  excess  of  $14,000,000  over  the  pre- 
war average.    In  quantity,  however,  piece  goods  have  suf- 
fered a  serious  decline  since  1918  in  all  grades,  amounting 
to  43  per  cent  in  both  white  and  colored  goods,  which  also 
declined  eight  per  cent  and  27  per  cent,  respectively,  in 
value  to  $42,000,000  and  $38,000,000.    Gray  goods,  which 
showed  only  a  seven  per  cent  decrease  in  quantity,  owing  to 
heavy  Japanese  sales,  increased  28  per  cent  in  value  to 
$76,000,000.     Tents  and  hosiery  both  declined  about  30  per 
cent  in  value  to  $2,800,000  each,  while  the  imports  of  thread 
fell  off  10  per  cent  to  $1,900,000,  and  handkerchiefs  and 
shawls  increased  30  per  cent  to  $670,000.     Sixty-two  per 
cent  of  the  gray  goods,  95  per  cent  of  the  white  goods,  and 
87  per  cent  of  the  colored  goods  were  supplied  by  the  United 
Kingdom,  while  the  balance  of  the  imports  in  these  classes 
of  goods,  as  well  as  80  per  cent  of  the  hosiery,  came  from 
Japan.     The  trade  of  all  other  countries  in  piece  goods 
amounted  to  a  little  over  one  per  cent  of  the  total  imports. 
The  share  of  the  United  States  amounted  to  a  trifle  over 
$1,000,000,  but  exceeded  that  of  Italy,  France,  and  Hol- 
land. 

Cotton  Yam. — The  value  of  cotton  twist  and  yarn  im- 
ports in  1919,  $28,700,000,  was  more  than  double  that  of 
1918.  This  fact  taken  in  conjunction  with  the  decline  in 
the  imports  of  piece  goods  denotes  an  increasing  use  of 
foreign  yarns  in  Indian  looms.  Sixty  per  cent  of  the  yarn 
imports  came  from  Japan  and  39  per  cent  from  the  United 


260 


TRADING  WITH  ASIA 


Kingdom,  leaving  one  per  cent,  or  less  than  half  a  million 
dollars  worth,  to  be  supplied  by  all  other  countries.  There 
is  every  indication  that  much  more  of  the  better  class  of 
cotton  piece  goods  may  be  supplied  to  the  Indian  market 
in  the  future  through  native  looms  operating  on  imported 
yams. 

Sugar.— India's  imports  of  sugar  amounted  to  506,700 
tons  in  1919,  or  36,000  tons  more  than  the  1918  imports, 
and  33,400  tons  over  the  pre-war.  average.  Of  this  total 
tonnage  Java  supplied  363,100  tons,  or  72  per  cent,  Mauri- 
tius, 77,200  tons,  or  13  per  cent,  and  the  Straits  Settle- 
ments 62,100  tons,  or  12  per  cent,  while,  the  balance  of  three 
per  cent  was  supplied  by  China,  Egypt,  and  Japan.  The 
1919  imports  of  sugar,  though  considerably  larger  in 
amount  than  1918,  show  only  a  $1,000,000  increase  in  value, 
indicating  a  considerable  drop  in  prices. 

Iron  and  Steel.— The  tonnage  of  iron  and  steel  imports 
has  declined  continuously  since  the  1909  to  1914  period 
when  a  yearly  average'  of  735,300  tons  was  imported.  The 
608,600  tons  brought  in  during  1915  dropped  to  424,000 
tons  in  1916,  to  257,200  tons  in  1917,  and  to  152,000  tons  in 
1918.  In  1919  the  difiSculty  of  obtaining  supplies  was  not 
as  great,  although  resulting  high  prices  and  the  use  of  sub- 
stitutes still  held  the  imports  to  181,400  tons,  while  the 
value  rose  60  per  cent  from  $25,000,000  in  1918  to  $40,000,- 
000  in  1919,  or  only  $4,000,000  more  in  value  than  the  pre- 
war import  average,  but  representing  only  one-fourth  the 
amount  of  actual  goods. 

The  imports  from  the  United  Kingdom,  which  had 
amounted  to  60  per  cent  of  the  whole  before  the  war,  and 
70  per  cent  in  1915,  1916,  and  1917,  dropped  to  51  per  cent 
in  1918  and  42  per  cent  in  1919.  The  imports  from  the 
United  States,  which  amounted  to  only  three  per  cent  be- 
fore the  war  and  five  per  cent  in  1915,  jumped  to  27  per 
cent  in  1916  and  1917,  41  per  cent  in  1918,  and  42  per 


MARKET  ANALYSIS  OF  BRITISH  INDIA        261 

cent,  or  the  same  as  United  Kingdom's  share,  in  1919.  The 
imports  from  Japan  were  nil  before  the  war  and  only 
reached  one  per  cent  in  1917,  three  per  cent  in  1918,  and 
eight  per  cent  in  1919.  The  remaining  eight  per  cent 
of  the  iron  and  steel  imports  were  supplied  by  other  coun- 
tries. 

The  principal  classes  of  goods  imported  in  1919  were  steel 
bars  and  channels,  21,600  tons  from  the  United  States,  and 
only  3,500  tons  from  the  United  Kingdom,  showing  an  in- 
crease of  20,000  tons  in  all.    There  were  increased  imports 
of  nails,  rivets,  washers,  screws,  hoops,  strips,  bolts,  nuts, 
steel  angles,  and  springs.    Due  to  competition  from  home, 
manufacturers'  corrugated  sheets,  which  had  represented 
175,500  tons  of  the  pre-war  tonnage,  declined  to  5,500  tons 
in  1918,  and  2,500  tons  in  1919.    Tin  plates  amounting  to 
32,000  tons  showed  little  change  over  1918  and  were  three 
per  cent  above  the  pre-war  average.     Ungalvanized  sheets 
and  plates  amounted  to  18,000  tons,  and  were  four  per  cent 
below  1918  and  only  one-fifth  the  pre-war  average,  the 
United  States  and  United  Kingdom  being  the  principal 
suppliers. 

Machinery. — The  1919  imports  of  machinery  were  valued 
at  $19,000,000,  compared  with  $17,000,000  for  1918,  and, 
while  quantity  statistics  are  not  available,  it  is  probable 
that  price  advance  accounted  for  only  a  part  of  the  increase 
in  import  values.  Cotton-mill  machinery,  valued  at  $5,- 
350,000,  showed  an  increase  of  $1,600,000  over  1918,  and 
fully  83  per  cent  came  from  the  United  Kingdom,  only  nine 
per  cent  from  the  United  States,  and  eight  per  cent  from 
Japan.  Ninety-one  per  cent  of  this  machinery  was  for  the 
Bombay  district.  Jute-mill  machinery  was  the  second  larg- 
est item,  amounting  to  $1,850,000,  a  decline  of  nearly  $400,- 
000  from  1918  figures.  Ninety-five  per  cent  of  these  im- 
ports came  from  the  United  Kingdom,  Japan  being  the 
other  supplier.    Electrical  machinery,  valued  at  $1,260,000, 


262 


TRADING  WITH  ASIA 


4 
I 


over  a  third  more  than  the  1918  imports,  was  divided 
equally  between  the  United  Kingdom  with  $650,000,  and  the 
United  States  with  $520,000,  the  balance  of  $90,000  being 
supplied  from  all  oiher  countries.  Before  the  war  the 
share  of  these  two  countries  had  been  $1,000,000  for  the 
United  Kingdom  and  $65,000  for  the  United  States,  and  the 
gratifying  growth  of  America's  share  in  this  line  of  the 
Indian  import  trade  indicates  greater  possibilities  in  the 
future.  Boiler  imports  amounted  to  only  $750,000  in  1919. 
against  $325,000  in  1918,  while  sewing  and  knitting  ma- 
chines declined  $30,000  from  $57,000  in  1918,  97  per  cent 
of  the  supplies  coming  from  the  United  States.  Other 
important  items  in  the  machinery  imports  were  tea-garden 
machinery,  $485,000,  and  mining  machinery,  $350,000. 

Of  the  total  imports  of  $19,000,000,  the  United  Kingdom 
led  with  $10,500,000,  half  a  million  more  than  in  1918, 
while  the  United  States  with  $4,500,000  shelved  nearly  a 
50  per  cent  increase  over,  their  1918  share.  Ja\pan  with 
nearly  $800,000  was  the  next  largest  supplier  of  this  item, 
leaving  $3,200,000  to  come  from  all  other  countries. 

Silk. — Raw  and  manufactured  silk  imports  amounted  to 
$15,400,000  in  1919,  about  $2,600,000  more  than  the  pre- 
war average.  This  value,  however,  indicates  an  actual  de- 
crease in  quantities  because  of  high  prices.  P'orty-five  per 
cent  of  the  total  was  supplied  by  Japan,  practically  all  be- 
ing silk  manufactures,  including  yam,  while  five  per  cent 
were  French  products,  two  per  cent  British,  and  two  per 
cent  Italian.  The  balance  of  this  trade  was  with  China, 
Hongkong,  the  Straits  Settlements  and  other  Eastern  coun- 
tries, and  included  mostly  raw  silk  and  yam. 

Chemicals  and  Drugs.— A  decline  of  $300,000  in  the 
chemical  and  drug  trade  from  the  1918  figures  marked  the 
1919  period  when  imports  only  reached  $13,700,000.  This 
value,  however,  was  almost  double  the  pre-war  import  fig- 
ures of  $6,900,000.    Of  the  total  1919  imports  of  this  class 


MARKET  ANALYSIS  OF  BRITISH  INDIA        263 

over  $8,000,000  were  chemicals,  including  calcium  carbide, 
soda  bicarbonate,  and  acids  in  large  quantities,  while  de- 
creasing quantities  of  sulphur,  alum,  ammonia,  caustic 
soda,  and  sodium  carbonate  marked  the  cessation  of  many 
war  industries.  Sixty-three  per  cent  of  the  chemical  im- 
ports were  from  the  United  Kingdom,  24  per  cent  from 
Japan,  and  six  per  cent  from  the  United  States.  Dmg  im- 
ports in  1919  amounted  to  $4,700,000,  while  patent  medi- 
cines valued  at  $850,000  accounted  for  the  remaining  im- 
ports. 

Mineral  Oils.— During  1919  60,441,000  gallons  of  min- 
eral  oil  valued  at  $11,700,000  were  brought  into  India, 
showing  a  decrease  of  more  than  30,000,000  gallons  from  the 
pre-war  average,  although  the  pre-war  value  was  over  $12,- 
000,000.     Fuel  oil  imports  of  27,000,000  gallons  were  over 
three  times  the  pre-war  imports  of  8,000,000  gallons,  and 
lubricating  oil  imports  of  19,000,000  gallons  also  showed  a 
considerable  gain  over  the  13,500,000  gallons  of  this  com- 
modity brought  in  the  average  pre-war  year.     Kerosene  in 
bulk,  however,  feU  from  50,000,000  gallons  before  the  war 
to  7,000,000  gallons  in  1919,  and  kerosene  in  tins  dropped 
from  16,000,000  gallons  before  the  war  to  5,000,000  gal- 
lons in  1919.     This  change  in  the  character  of  India's  oil 
trade  is  almost  entirely  explained  by  shipping  difficulties 
which  have  encouraged  production  nearer  home.     Nearby, 
Persian  fuel  oils  have  supplied  the  increasing  Indian  de- 
mand, and  lubricating  oils  from  Borneo  have  taken  the 
place  of  those  previously  brought  from  the  West.     Burma 
supplied  India  with  117,000,000  gallons  of  kerosene   in 
1919,  supplanting  much  of  the  quantity  formerly  imported 
from  the  United  States. 

Liquors.— India's  liquor  imports  amounted  to  $10,700,- 
000  in  1919,  about  60  per  cent  coming  from  the  United 
Kindom,  16  per  cent  from  France,  and  24  per  cent  from 
other  countries.    This  is  a  substantial  increase  over  pre- 


264 


TRADING  WITH  ASIA 


[•>   I 


t 


war  imports  of  $6,500,000  in  value,  though  actual  quanti- 
ties have  remained  about  the  same. 

Hardware.—The  value  of  hardware  imports  was  $10,- 
400,000  in  1919  and  this  showed  only  a  slight  increase  of 
about   $100,000   over   the   pre-war  average.     The  United 
Kingdom,  which  had  supplied  59  per  cent  before  the  war, 
furnished  only  36  per  cent  of  the  1919  imports,  while  the 
United  States'  pre-war  share  of  seven  per  cent  increased 
to  31  per  cent,  and  Japan's  one  per  cent  to  29  per  cent. 
Other  countries  had  supplied  33  per  cent  of  the  pre-war 
imports,  but  this  fell  to  four  per  cent  in  1919.    The  change 
in  character  of  hardware  imports  not  only  account*  for 
much  of  this  diverted  trade,  but  also  indicates  changes  ia 
India's  economic  life.    Agricultural  implements  increased 
threefold  over  1918  to- $600,000  in  1919,  and  builder's  hard- 
ware soared  from  $30,000  to  $600,000.     Other,  implements 
reached  $1,950,000  in  value  in  1919,  an  increase  over  the 
preceding  year  of  50  per  cent,  a  fifth  being  shipped  from 
Japan.     Enameled  ironware  showed  decreased  imports  of 
40  per  cent  to  $350,000,  the  domestic  product  supplanting 
Japanese  ware.    Imports  of  metal  lamps  fell  from  4,662,000 
in  number  before  the  war  to  800.000  in  1919,  85  per  cent 
coming  from  the  United  States  and  nine  per  cent  from 
Japan.    Cutlery  imports  of  $600,000  were  supplied,  43 
per  cent  from  the  United  Kingdom,  32  per  cent  from  the 
United  States,  and  23  per  cent  from  Japan.     The  United 
Kingdom  supplied  most  of  the  $130,000  worth,  of  electro- 
plated  ware. 

Paper  and  Pasteboard.— Imports  of  paper  products  dou- 
bled from  the  period  before  the  war  reaching  $8,800,000  in 
1919.  Japan  supplied  26  per  cent  against  practically  noth- 
ing before  the  war,  while  the  United  States  and  Norway, 
each  with  22  per  cent,  the  United  Kingdom  with  20  per 
cent,  Sweden  with  five  per  cent,  and  other  countries  with 
&ve  per  cent,  all  combined  to  supplant  the  58  per  cent  sup- 


MARKET  ANALYSIS  OF  BRITISH  INDIA        265 

plied  by  the  United  Kingdom,  the  17  per  cent  by  Germany, 
the  nine  per.cent  by  Austria-Hungary,  and  the  10  per  cent 
furnished  by  all  other  countries  before  the  war.    In  1919 
the  9,700  tons  of  printing  paper  that  were  purchased  abroad 
comprised  47  per  cent  from  Norway  and  27  per  cent  from 
the  United  States,  while  the  United  Kingdom,  Japan,  and 
Sweden  furnished  the  balance  of  26  per  cent.     Writing 
paper  and  envelopes  valued  at  $1,600,000  came  largely 
from  the  United  States.    Indian  paper  mill  production,  in- 
creasing  from  26,450  tons  before  the  war  to  31,360  tons  in 
1919,  supplied  some  of  the  growing  demand  which  would 
otherwise  have  been  imported,  although  the  shortage  of 
sahai,  from  which  the  domestic  product  is  made,  has  held 
the  industry  in  check.    The  difficulty  experienced  in  ob- 
taining foreign  pulp,  which  reduced  the  imports  from  3  000 
tons  in  1918  to  2,100  tons  in  1919,  has  led  to  definite  steps 
to  develop  the  bamboo  pulp  industry  in  India  and  Burma. 
Salt.— India's  demand  for  salt  is  supplied  almost  entirely 
from  the  Orient,  only  about  $790,000  worth  of  the  $7,- 
500,000  worth  imported  coming  from  the  United  Kingdom 
and  $290,000  worth  from  Spain. 

ProvisionB.— The  total  value  of  provisions  imported  in 
1919  was  $6,300,000,  of  which  32  per  cent  were  canned  and 
bottled  provisions,  26  per  cent  farinaceous  and  patent 
foods,  15  per  cent  condensed  and  preserved  milk,  and  27 
per  cent  other  provisions,  including  bacon,  ham^,  cocoa, 
chocolate,  biscuits,  and  cakes.  Larger  quantities  of  sago 
and  sago  flour  are  being  imported  from  the  Straits  Settle- 
ments  annually,  accounting  for  the  increased  proportion  of 
farinaceous  food,  while  biscuits  purchased  in  1919  were 
only  one-twelfth  the  pre-war  supply,  48  per  cent  coming 
from  Japan,  37  per  cent  from  Australia,  and  15  per  cent 
from  other  countries.  About  41,000  tons  of  canned  and 
bottled  provisions  are  brought  in  every  year,  while  820  tons 
of  jams  and  jellies  were  imported  in  1919,  a  third  more 


I 


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M 


266 


TRADING  WITH  ASIA 


than  the  preceding:  year;  83  per  cent  of  which  originated 
in  Australia,  whose  pre-war  share  of  the  trade  had  been 
only  two  per  cent.  Cocoa  and  chocolate  came  principally 
from  the  United  States,  while  that  country  supplied  40  per 
cent  of  the  2,100  tons  of  condensed  milk,  Australia  pro- 
vided 23  per  cent,  and  other  countries  37  per  cent.  The 
United  Kingdom,  which  had  shipped  680  tons  of  condensed 
milk  to  India  in  1918,  showed  only  10  tons  among  the 
1919  receipts. 

Railway  Materials.— One  of  the  most  striking  effects  of 
the  war  on  India's  import  trade  was  the  falling  off  in  the 
purchases  ai  railway  equipment  and  rolling  stock  abroad. 
The  1919  imports  were  only  $3,300,000,  whi(?h  was  double 
the  1918  figures,  but  considering  advanced  prices,  negligi- 
ble in  quantity  as  compared  with  the  $19,800,000  average 
imports  in  the  five  years  before  the  war.  Practically  all 
new  construction,  except  for  war  needs,  has  been  held  in 
abeyance,  and  the  1919  imports  practically  represent  only 
much  needed  repairs.  With  the  return  to  normal  condi- 
tions, Indian  railway  construction,  in  common  with  that 
of  all  the  world,  will  experience  renewed  activity. 

Motor  Cars,  Cycles,  and  Accessories.— The  value  of  the 
imports  of  automobiles  and  motor  cyeles  was  $1,200,000 
in  1919,  just  half  the  1918  figure,  and  a  little  more  than 
one-third  the  pre-war  average.  This  was  accounted  for  by 
the  embargo  on  motor  car  imparts,  which  extended  through- 
out eight  months  of  the  1919  fiscal  year.  The  pre-war,  or 
1914,  number  of  motor  cars  imported  was  2,880,  while  the 
war  years  showed  2,005  in  1915,  3,121  in  1916,  and  4,778 
in  1917.  In  the  1918  fiscal  year  the  embargo  first  became 
effective,  and  the  number  brought  in  dropped  to  1,262, 
including  76  trucks,  while  the  1919  total  came  to  only  400, 
including  eight  trucks.  The  increasing  share  of  the  United 
States  in  this  trade  is  indicated  by  the  fact  that  while  only 
30  per  cent  of  the  motor  cars  imported  in  the  pre-war  year 


MARKET  ANALYSIS  OF  BRITISH  INDIA       267 

came  from  the  United  States,  our  share  had  grown  to 
70  per  cent  during  the  1915  to  1919  period. 

In  March,  1919,  there  were  19,385  motor  cars  and  8,058 
motorcycles  registered  in  India. 

During  1919  only  94,658  motor  car  and  cycle  tires  were 
imported  against  92,428  in  1918,  while  only  76,000  tubes 
were  imported  compared  with  89,000  in  the  preceding  year. 
The  value  of  these  imports  decreased  from  $475,000  to 
$350,000,  and  the  United  Kingdom  increased  its  share  of 
the  trade  from  46  per  cent  to  51  per  cent. 

Conclusions  of  Indian  Market  Analysis. — India's  import 
tr^de,  consisting  principally  of  manufactured  goods,  is  being 
supplied  largely  by  three  countries,  the  United  Kingdom, 
Japan,  and  the  United  States.  The  trade  which  the  United 
Kingdom  was  forced  by  the  war  to  relinquish  has  been  ap- 
propriated to  a  great  extent  by  Japan,  and  in  certain  lines 
by  the  United  States.  The  struggle  to  retain  the  share  that 
she  has  will  depend  upon  the  ability  of  British  manufac- 
turers to  meet  the  conditions  in  the  Indian  market  which 
the  new  competition  has  created.  These  manfacturers  are 
more  alive  to  the  situation,  probably,  than  any  of  their  new 
competitors,  and  few  steps  will  be  overlooked  which  may 
lead  to  the  restoration  of  British  predominance  in  Indian 
commerce. 

Questions 

1.  How  is  India's  favorable  balance  of  trade  detrimental  to  the 

country  f 

2.  Describe  the  trade  in  cotton  piece  goods  and  cotton  yam. 

3.  (o)  To  what  extent  has  the  United  States  entered  the  iron  and 

steel  trade  of  India? 
(h)  The  machinery  trade? 

4.  Discuss  the  import  trade  in  mineral  oils  and  the  reasons  for 

changes. 

6.  Discuss  the  growth  of  automobile  and  motor  cycle  imports. 


MARKET  ANALYSIS  OF  BURMA 


269 


'  ■ '  < 


,/; 


i 


[r     ' 


i 


CHAPTER  XVII 

AGRICULTURE,  INDUSTRIES,  AND  MARKET  ANALYSIS  OF  BURMA 

Burma,  with  a  population  of  12,115,217  in  1911,  is  eco- 
nonucally,  though  not  administratively,  distinct  from  Brit- 
ish  India.    An  unusually  mountainous  hinterland  feeds 
the  Irawaddy  River,  in  whose  delta  region  the  principal 
crop,  nee,  is  extensively  grown.     This  product,  together 
with  petroleum  products,  constituted  80  per  cent  of  Bur- 
ma's export  trade  in  1919.     Ethnologically  Burma  may  be 
grouped  with  Siam  and  French  Indo-China,  although  com- 
mercially its  interests  lie  with  British  India,  with  which 
$81,000,000  worth,  or  57  per  cent,  of  its  $141,000,000  export 
trade  was  carried  on  in  1919.     The  balance  of  its  exports 
went  principally  to  the  United  Kingdom,  Japan,  the  Straits 
bettlements,  Ceylon,  the  Dutch  East  Indies,  and  Euro- 
pean countries. 

Agriculture  and  Ii«)ustries 
Eice.— About  two-thirds  of  Burma's  rice  crop  comes  from 
Lower  Burma,  or  the  Irawaddy  delta,  where  it  represents 
90  per  cent  of  the  cultivated  area.    The  paddy  is  usually 
taken  over  from  the  cultivator  towards  the  end  of  Novem- 
ber on  the  threshing  floor,  either  by  middlemen  from  the 
mills  or  speculators,  and  carted  in  bags  and  baskets  to  rail- 
head or  river,  whence  it  is  transported  in  bulk  to  the  mills. 
The  mills  own  their  own  boats  which  make  three  or  four 
trips  a  month  to  the  up-river  districts.    The  crop  is  han- 
died  by  coolies  without  mechanical  aid  and  storage  is  now 
provided  up  country  for  half  the  normal  crop.    As  the 
paddy  deteriorates  in  color  by  heating  it  is  usuaUy  milled 

268 


as  soon  as  possible  and  is  on  the  market  commercially  from 
January  15  until  April  15.    The  milling  consists  of  several 
successive  processes  according  to  the  grade  of  rice  desired. 
Rice  which  has  simply  been  husked  and  winnowed,  consist- 
ing of  about  80  per  cent  loonzain  and  20  per  cent  paddy, 
is  known  as  cargo  rice.    To  produce  white  rice  this  is 
milled  by  cones  to  remove  the  outer  cuticle,  and  then  graded 
into  broken  and  unbroken  rice  by  sieving.     High-grade  rice 
for  Europe  is  further  polished  in  wool  and  wire  gauze 
cylinders  with  revolving  sheep-skin  rollers.    The  mills  run 
on  paddy  husk  for  fuel  and  are  operated  night  and  day  for 
about  three  months.    There  are  300  mills  in  Burma  em- 
ploying 20  hands  or  more  and  many  smaller  ones.    The 
total  capacity  of  Burma's  rice  mills  is  about  6,000,000  tons 
per  annum,  which  is  considerably  in  excess  of  the  2,400,000 
long  tons  valued  at  $78,000,000  exported  from  Burma  in 
1919.    Burma's  ratio  of  acreage  under  rice  to  population 
is  so  high  that  her  exportable  surplus  is  able  to  supply  any 
deficit  in  India  and  still  leave  a  large  quantity  for  export. 
In  1919  the  exports  to  India  were  797,000  tons,  to  the 
Straits  Settlements,  334,000  tons,  to  the  United  Kingdom, 
261,000   tons,   to  Japan,   205,000   tons,   to   Ceylon,   185,- 
000  tons,  to  France,  132,000  tons,  to  Italy,  129,000  tons, 
to  the  Dutch  East  Indies,  112,000  tons,  and  to  all  other 
countries,  245,000  tons.    Sixty-eight  per  cent  of  this  trade 
went  through  the  port  of  Rangoon,  13  per  cent  through 
Bassein,  10  per  cent  through  Moulmein,  and  the  balance, 
or  nine  per  cent,  through  Akyab. 

Petroleum  Products.— All  of  Burma's  117,444,000  gal- 
Ions  of  exported  kerosene  in  1919  went  to  India  where  its 
use  has  largely  superseded  vegetable  oil  as  an  illuminant 
and  which  offers  a  market  for  more  kerosene  than  Burma 
can  supply.  The  chief  producing  field  in  Burma  is  Yen- 
angyuang  which  supplied  200,000,000  gallons  of  the  277,- 
500,000  gallons  produced  in  all  India  in  1913.    Of  the 


270 


TRADING  WITH  ASIA 


MARKET  ANALYSIS  OF  BURMA 


271 


i 

I 


23,600,000  gallons  of  motor  spirits  exported  from  Burma 
in  1919  all  but  1,000,000  gallons,  shipped  to  India,  went 
to  foreign  countries.  India  took  15,700,000  gallons  of 
other  mineral  oils,  however,  leaving  only  2,000,000  gallona 
for  export  abroad.  In  all  Burma  shipped  158,700,000  gal- 
Ions  of  mineral  oils,  134,000,000  gallons  of  which  went  to 
India ;  490,000  hundredweight  of  paraffin,  463,000  hundred- 
weight  of  which  went  to  India ;  and  138,000  hundredweight 
of  candles,  65,000  hundredweight  going  to  India.  The 
total  value  of  these  products  was  $24,000,000. 

Cotton.— Cotton  exports  in  1919  showed  a  notable  in- 
crease with  a  total  of  273,000  tons  valued  at  $7,500,000 
against  204,000  tons  in  the  preceding  year.  The  United 
Kingdom  took  117,000  tons,  India  82,000,  and  Japan  74,- 
000  tons.  Burma  has  had  an  average  of  254,000  acres  un- 
der cotton  during  the  war,  seven-eighths  of  the  product 
being  a  three-fourths-inch  short  staple  raised  principally 
in  the  dry  zone.  In  the  Shan  Hills  a  one-inch  staple  ia 
produced.  The  average  production  is  54,000  bales  of  400 
pounds  each.  Of  this  quantity  53,700  bales  or  eight  per 
cent  of  the  total  exports  were  sent  abroad  in  1919. 

Beans. — Burma  white  beans,  formerly  used  as  a  cattle 
feed,  have  lately  developed  as  an  important  export  for 
human  consumption  in  Europe.  The  total  exportable  sur- 
plus in  1919  of  105,000  tons  was  purchased  by  the  Royal 
Commission  for  Wheat  Supplies  and  shipped  to  England. 
With  the  letum  to  normal  conditions  in  Europe  the  de- 
mand for  th^s  product,  which  supplanted  the  haricot  bean 
of  the  Danube  region,  is  expected  to  fall  off.  The  value  of 
gram  and  bean  exports  in  1919  was  $7,200,000. 

Teak  and  Timber.— The  production  of  teak  is  about  366,- 
000  cubic  tons  per  year,  of  which  116,000  tons  were  ex- 
ported in  1919,  89,000  tons  to  India  and  27,000  to  other 
countries.  This  was  the  smallest  amount  shipped  abroad 
in  many  years,  largely  because  of  unsettled  conditions  fol- 


lowing the  close  of  the  war  and  lack  of  shipping  space. 
Other  timber  exports  consisted  of  deodar,  sal,  rosewood, 
etc.,  amounting  to  4,300  tons,  all  of  which  went  to  India. 
The  total  value  of  Burma's  timber  exports  in  1919  was 

$5,100,000. 
Tungsten.— The  export  of  tungsten  in  1919  was  4,800 

tons  valued  at  $3,600,000  or  several  hundred  tons  more 
than  the  1917  and  1918  exports,  notwithstanding  a  fall  in 
prices  since  the  war.  The  demand  for  this  product,  which 
is  used  in  high-speed  steel  manufacture,  has  ceased.  Be- 
fore the  war  Burma's  wolfram  was  shipped  to  Germany 
for  metallurgical  treatment,  but  the  entire  output  is  now 
controlled  by  the  Government.  The  Tavoy  district  alone 
furnished  three-fourths  of  the  output,  while  Yemethin, 
Manchi,  and  Mergui  contributed  the  balance.  Scientific 
methods,  including  hydraulic  mining,  modem  concentrating 
mills,  the  use  of  hydro-electric  power,  air  compressors,  and 
machine  drills  are  replacing  the  crude  methods  formerly  em- 
ployed. 

Eaw  Hides  and  Skins.— In  1919  150,000  hundredweight 
of  raw  hides  were  shipped  from  Burma,  one-half  of  which 
went  to  the  United  Kingdom  and  Italy  and  one-half  to 
India.  This  was  an  eight  per  cent  increase  over  the  1918 
shipments,  but  a  10  per  cent  decrease  compared  with  1917 
exports.    The  value  of  raw  hide  and  skin  exports  was  $2,- 

600,000. 

Silver.— The  Bawdwin  mine  in  the  Northern  Shan  States 
produced  1,970,000  ounces  of  silver  in  1918,  which  was 
400,000  ounces  more  than  the  1917  production  and  nearly 
three  times  that  of  1916.  The  exports  in  1919  were  valued 
at  $1,930,000,  all  of  which  went  to  the  British  Indian  Gov- 
ernment for  minting  purposes. 

Bubber.— The  Burma  Government  plantation  at  Mergui 
had  demonstrated  by  1910  that  Para  rubber  could  be  grown 
in  Burma  and  the  product  grown  there  was  sold  to  a  lim- 


272 


I 


TRADING  WITH  ASIA 


ited  company  while  other  plantations  were  started  near 
Rangoon.  In  1916  new  rules  governing  rubber  planta- 
tions were  promulgated  to  encourage  the  industry,  many 
suitable  areas  being  still  unexploited.  In  1918,  63,500  acres 
were  under  rubber  in  Burma  and  in  1919,  4,149,000  pounds 
valued  at  $1,500,000  were  shipped  abroad,  largely  to  the 
United  Kingdom.  A  two  per  cent  royalty  is  levied  on 
Burma  rubber  exports  calculated  on  the  net  value  each 
month  on  the  London  market,  less  Government  allowances 
towards  cost  of  production,  freight,  and  sale  charges. 

Pig  Lead.— Exports  of  pig  lead  in  1919  amounted  to 
17,900  tons,  practically  the  entire  production  of  the  Bawd- 
win  mine  for  1918.  The  value  of  the  export  was  $1,400,- 
000.  Eight  thousand  seven  hundred  tons  went  to  India 
and  half  the  balance  to  Ceylon  for  tea  chests. 

Tobacco.— In  1919  14,500,000  pounds  of  unmanufactured 
tobacco,  or  46  per  cent  of  the  combined  export  of  India 
and  Burma,  were  shipped  abroad,  principally  to  France. 
Aden,  the  Straits  Settlements,  and  the  United  Kingdom. 
In  addition  to  these  exports,  8,000,000  pounds  of  manu- 
factured tobacco,  mainly  ** Burma  cheroots,''  made  in  Kan- 
goon  from  Burmese  tobacco  and  from  that  grown  in  Bengal 
and  Madras,  were  shipped  principally  to  Malaya,  Siam,  and 
the  United  Kingdom.  The  total  value  of  these  tobacco  ship- 
ments was  $1,200,000. 

Outch.— Cutch  exports,  mainly  to  the  United  Kingdom 
for  tanning  and  dyeing  vary  with  the  licenses  for  boiling 
issued  by  the  Forestry  Department.  It  is  derived  from 
the  acacia  catechu  found  in  the  western  Himalayas  and 
northeastern  Burma.  A  ton  of  wood  cut  in  chips  from 
the  heart  of  this  tree  and  boiled  to  the  consistency  of  syrup 
yields  from  250  to  300  pounds  of  cutch.  The  total  exports 
of  79,000  hundredweight  in  1919  were  valued  at  $500,- 
000,  going  mainly  to  the  United  Kingdom,  P>ance,  Ger- 
many, and  Holland.     The  Rangoon  unit  of  sale  is  the  hun- 


MARKET  ANALYSIS  OF  BURMA 


273 


dredweight  and  shipment  is  made  in  cases  weighing  from 
50  to  124  pounds  net. 

Tin.~Block  tin,  entirely  from  Mergui,  amounting  to 
2,000  hundredweight  and  tin  ore  weighing  15,600  hundred- 
weight, over  half  from  the  Southern  Shan  States  and  one- 
quarter  from  Tavoy,  was  produced  in  1918.  The  exports 
in  1919  were  460  tons  valued  at  $425,000,  four-fifths  of 
which  went  abroad,  mainly  to  England  for  separation,  the 
remainder  to  India.  The  ore  is  recovered  by  washing  allu- 
vial gravels  and  formerly  mixed  tin  and  tungsten  concen- 
trates were  shipped  to  the  Straits  Settlements  for  separa- 
tion, but  a  plant  for  this  purpose  has  now  been  erected  at 

Tavoy. 
Jade  and  Rubies.— In  1919  jade  exports,  of  certain  kinds 

of  which  Burma  is  the  chief  source  of  supply,  amounted  to 

2,700  hundredweight,  valued  at  $400,000.    Hongkong  was 

the  chief  purchaser  and  about  one-fifth  went  to  China  across 

the  frontier. 

No  record  is  kept  of  ruby,  sapphire,  and  spinel  exports  as 
most  of  these  jewels  go  out  as  personal  effects.  Mogok  in 
Upper  Burma,  where  the  Burma  Ruby  Mines  are  located, 
produced  198,200  carats,  principally  of  pigeon  blood  rubies, 
in  1917,  valued  at  about  $200,000,  the  inferior  stones  being 
sold  locally  and  the  larger  ones  going  to  London. 

Lac— In  1919  19,000  hundredweight  of  lac  valued  at 
$350,000,  18,700  hundredweight  of  which  was  stick  lac  for 
shipment  to  India,  were  exported.  The  remaining  200  hun- 
dredweight of  shell  lac  went  to  the  United  Kingdom. 
Three-fifths  of  these  exports  came  from  the  Shan  States 
and  two-fifths  were  imported  from  western  China. 

Analysis  op  Imports 

In  Burma's  $82,000,000  import  trade  in  1919  the  prin- 
cipal sharers  were  India,  the  United  Kingdom,  Japan,  and 
the  United  States,  our  portion  being  less  than  $3,000,000. 


274 


TRADING  WITH  ASIA 


■ 


I 


The  actual  quantities  of  goods  brought  in  showed  little  if 
any  increase  over  1917  and  1918,  although  high  prices 
caused  an  increase  of  $20,000,000  over  the  1918  total  values 
and  $13,000,000  over  the  1917  values. 

Cotton  Groods. — Cotton  piece  goods  imports  valued  at 
$17,000,000  consisted  of  16,800,000  yards  of  unbleached 
gray  goods,  three-fourths  from  India  and  nearly  one-fourth 
from  other  countries,  principaDy  Japan,  only  800,000  yards 
coming  from  the  United  Kingdom,  as  against  9,000,000 
yards  supplied  by  that  country  in  1917,  out  of  a  total 
import  for  that  year  of  24,000,000  yards.  As  India's  sup- 
ply has  remained  steady  this  means  that  in  1919  the  United 
Kingdom  had  been  supplanted  in  this  trade,  consisting  of 
long  cloth  and  skirting,  by  Japan. 

In  bleached  white  goods  the  trade  had  dropped  from  41,- 
000,000  yards  in  1917  to  23,000,000  yards  in  1919  and  the 
United  Kingdom's  share  decreased  from  31,000,000  yards 
to  12,000,000  yards.  India,  the  other  supplier,  had  in- 
creased her  sales  from  9,000,000  yards  to  10,000,000  yards, 
while  the  remaining  1,000,000  yards  was  steadily  supplied 
by  other  countries. 

Printed  and  dyed  colored  goods  showed  a  drop  of  20,000,- 
000  yards  in  1919  from  the  83,000,000  yard  imports  of 
1917.  The  39,000,000  yards  supplied  by  the  United  King- 
dom in  1917  were  transferred  to  India  in  1919  and  the 
United  Kingdom's  share  fell  to  13,000,000  yards.  The 
Netherlands'  trade  in  these  goods  fell  from  9,000,000  yards 
in  1917  to  900,000  yards  in  1919,  while  other  countries, 
largely  Japan,  increased  their  share  from  7,000,000  yards 
in  1917  to  9,000,000  yards  in  1919. 

Cotton  twist  and  yam  imports  amounting  to  14,000,000 
pounds  and  valued  at  $6,400,000,  13,400,000  pounds  from 
India  and  the  rest  from  the  United  Kingdom,  formed  an 
additional  part  of  the  cotton  goods  trade,  while  the  trade  in 
this  commodity  across  Burma  from  India  into  Yunnan 


MARKET  ANALYSIS  OF  BURMA 


275 


Province  of  China  increased  50  per  cent  in  quantity  in  that 

year. 

Other  cotton  manufactures  consisting  chiefly  of  sewing 
thread,  hosiery,  blankets,  canvas,  etc.,  showed  a  decided 
drop  in  value  from  $1,900,000  in  1917  to  $1,400,000  in 

1919. 

Jute  Manufacturers.— Jute  gunny  bags  for  rice  increased 
in  value  from  $4,000,000  in  1917  and  1918  to  $9,700,000  in 
1919.  These  goods,  which  are  brought  entirely  from  Cal- 
cutta, vary  in  quantity  with  the  size  of  the  paddy  crop  and 
the  amount  of  rice  stored,  milled,  and  exported. 

Silk  Goods.— Imports  of  raw  silk  and  silk  manufactures 
by  land  and  sea  increased  from  $2,000,000  in  1917  to  $3,- 
700,000  in  1919,  although  the  quantity  of  raw  silk  de- 
creased from  910,000  pounds  in  1917  to  369,000  pounds 
in  1919,  China  being  the  principal  seller  across  the  land 
frontier.  Pure  silk  piece  goods  also  dropped  from  4,000,- 
000  yards  in  1917  to  3,800,000  yards  in  1919,  with  Japan 
almost  sole  supplier.  Likewise,  mixed  silk  piece  goods, 
mainly  from  the  United  Kingdom,  fell  from  380,000  yards 
in  1917  to  80,000  yards  in  1919. 

Metals.— The  increase  in  value  of  imported  metals,  from 
$4,700,000  in  1917  to  $5,800,000  in  1919,  was  accounted  for 
largely  by  iron  and  steel  imports,  although  the  actual  ton- 
nage in  these  goods  decreased  from  28,000  tons  in  1917 
to  20,000  tons  in  1919.  The  principal  fall  was  in  pipes, 
tubes,  and  fittings  from  10,000  tons  to  3,000  tons,  although 
sheets  and  plates  showed  a  rise  from  8,000  tons  to  10,000 
tons.  Zinc  imports  remained  steady  at  5,000  hundred- 
weight, but  tin  jumped  from  242  to  3,000  hundredweight 
and  lead  fell  from  1,600  to  600  hundredweight.  The 
United  Kingdom  furnished  59  per  cent  and  the  United 
States  16  per  cent  of  Burma's  1919  metal  imports. 

Hardware  and  Machinery. — The  trade  in  hardware  and 
cutlery  showed  a  falling  off  from  $1,900,000  in  1917  to 


r 


h  .) 


i 


ii 


276 


TRADING  WITH  ASIA 


$1,600,000  in  1919,  of  which  the  United  Kingdom  fur- 
nished $400,000  worth  in  1919,  Japan  $300,000  and  the 
United  States  $200,000.  Implements  and  tools,  enameled 
ironware,  agricultural  implements,  metal  lamps,  and  build- 
ers'  hardware  formed  the  chief  classes  of  imports. 

Machinery  imports  remained  about  $1,200,000  during 
1917,  1918,  and  1919,  metal  working  machinery  showing  a 
slight  increase.  The  United  Kingdom  and  the  United 
States  took  most  of  this  trade. 

Provisions  and  Foodstuffs.— The  decline  in  imports  of 
provisions  from  $3,500,000  in  1917  to  $2,600,000  in  1919 
was  due  to  shipping  restrictions  of  the  United  Kingdom 
and  the  United  States.  Canned  milk  dropped  from  3,- 
000,000  pounds  in  1917  to  half  that  amount  in  1919,  and 
biscuits  and  cakes  from  1,300,000  to  40,000  pounds. 

Sugar  from  the  Dutch  East  Indies  increased  one-third  in 
quantity  from  300,000  hundredweight  in  1917,  but  only 
$500,000  in  value  of  imports  over  the  $1,300,000  of  1917. 
Fish  imports  remained  steady  at  $1,300,000. 

Other  Imports.—Spices,  chiefly  areca,  or  betel,  nuts,  chil- 
lies, pepper,  and  cardamons  from  India,  increased  from  $2  - 
100,000  to  $2,400,000. 

Coal  imports  remained  at  $2,200,000  throughout  the 
three  years. 

Tobacco,  mainly  manufactured,  from  India  for  the  mak- 
ing of  cheroots,  rose  from  $1,900,000  to  $2,200,000. 

Gram  and  beans  showed  an  increase  of  from  $1,800,000 
to  $2,200,000,  while  oils,  mainly  vegetable  oils,  dropped 
from  $1,900,000  to  $1,600,000. 

Questions 

1.  Describe  the  handling  and  milling  of  rice  in  Burma. 

2.  Discuss  the  production  and  export  of  petroleum  products. 

3.  What  is  the  nature  of  Burma's  cotton  and  where  is  it  Boldt 

4.  (a)  Discuss  Burma's  bean  trade. 

(6)  Why  did  teak  shipments  drop  during  the  wMf 


MARKET  ANALYSIS  OF  BURMA 


277 


5.  Discuss  tungsten,  silver,  tin,  and  lead. 

6.  (a)  How  has  rubber  production  grown  f 
(h)  How  is  cutch  made  and  for  what  usedt 

7.  What  were  the  principal  changes  in  Burma's  cotton  goods 

imports  from  1917  to  1919? 

8.  What  was  the  principal  metal  import  in  1919  and  the  chief 

suppliers? 

9.  Discuss  the  hardware  and  machinery  trade  of  Burma. 
10.  (o)  What  caused  provision  imports  to  decline  in  1919 1 

(5)  Name  three  other  imports  into  Burma. 


ii 


f 


MARKET  ANALYSIS  OF  CEYLON 


279 


I! 

III 


CHAPTER  XVIII 

A(JRI6CLTURE,  INDTOTEIES,  AND  MARKET  ANALYSIS  OF  CEYM, 

4 ^7^m^^''^  "*  ^f '°°  "'"^  *  populati.m  in  1916   of 

332  sm'^rn?  "*  ^'^^^''"^  ^'°^^1^^'  1"''",000  Tamils, 
332,300  other  Orientals,  and  8,000  Europeans,  i,  largei; 
an  agricultural  colony,  about  64  per  cent  of  the  populaSn 

1918  of  $68,500,000  showed  a  decided  drop  from  the  exnort 
fibres  of  1917  of  about  $30,000,000,  due' mainly  to  S 
restrictions  in  the  United  States  and  the  United  Kingdom 

the  uUd  Stir V''  ''"*^'  ^'"^<^''-'  "^'^  42  pe/cent 
the  United  States,  17  per  cent,  British  India,  12  per  cent 

Australasia,  nine  per  cent,  Canada,  five  per  cent   Br  S 

countrier^"  ""'•  ''™''"  *"°  ^'^  •=«"*•  "'•d  ;il  oSr 
countnes,  nine  per  cent. 

Agriculture  and  Industries 
Tea.--Tea  shipments  dropped  from  195,000,000  pounds 
r.i  nnl  ''  ^^^>^^^^0^^  Pomids  in  1918  and  the  valurfrom 
$31  000,000  to  $27,000,000.  This  was  the  smallest  am^^^^^^^ 
of  tea  shipped  from  Ceylon  since  1908,  the  record  year 
bemg  1915  when  215,000,000  pounds  were  shipped  ahroad 

ffthe' B  Tl  i  '';  r  "^  ''''  ^^*P"*  -^«  requisitioned 
by  the  British  Food  Controller  through  the  Ceylon  Tea 

25,000  000  pounds  m  1917  to  11,000,000  pounds  in  1918, 
while  Russian  exports  dropped  from  14,000,000  pounds  in 
IZaT  f  7     ""^    '"'•   ^!^^'    ^PP^^^i^^ately    200,000,000 

acres.    The  estates,  ranging  from  100  to  2,500  acres  are 

278  ' 


worked  under  European  supervision  with  Tamil  labor 
from  southern  India,  and  are  located  on  elevations  ranging 
from  sea  level  to  7,000  feet.  Large  quantities  of  artificial 
fertilizers  are  used  but  the  making  of  the  crop  depends 
primarily  upon  the  monsoon  which  brings  the  rains.  The 
planting  of  permanent  green  manure  trees  has  been  found 
a  satisfactory  method  of  fertilizing.  There  are  1,040  tea 
firing  and  rubber  drying  establishments  in  Ceylon. 

Rubber. — Restrictions  placed  on  rubber  shipments  by 
the  United  States  in  1918  caused  a  drop  in  exports  of  from 
75,000,000  pounds  valued  at  $44,000,000  in  1917  to  50,000,- 
000  pounds  valued  at  $22,000,000  in  1918,  indicating  a  drop 
in  price  of  serious  proportions.  Notwithstanding  this  tem- 
porary reaction  the  area  in  Ceylon  rubber  continues  to  ex- 
pand and  255,000  acres  were  under  cultivation  in  1919. 
There  is  a  tendency  among  small  owners  to  plant  rubber 
on  lands  formerly  used  for  growing  food  products  and  this 
is  only  accentuating  the  problem  of  feeding  the  population 
of  Ceylon,  which  is  already  dependent  upon  India  and 
Burma  for  foodstuffs. 

Coconut  Products.~The  export  of  coconut  products 
which  had  reached  $16,000,000  in  1913  had  fallen  in  1918 
to  $11,500,000,  which  was  a  slight  increase  over  the  1917 
exports. 

Copra  shipments  increased  from  1,000,000  hundred- 
weight, valued  at  $4,300,000,  in  1917  to  1,200,000  hundred- 
weight, valued  at  $4,100,000,  in  1918.  The  shipments  were 
mainly  to  India. 

Coconut  oil  increased  from  430,000  hundredweight, 
valued  at  $3,200,000,  in  1917  to  520,000  hundredweight, 
valued  at  $5,000,000,  in  1918.  Much  of  this  product  was 
shipped  to  Europe  by  the  Imperial  Government. 

Desiccated  coconut,  largely  for  the  United  States, 
dropped  from  270,000  hundredweight,  valued  at  $3,000,000, 
in  1917  to  200,000  hundredweight,  valued  at  $1,700,000,  in 


;f 


H 


280 


TRADING  WITH  ASIA 


MARKET  ANALYSIS  OF  CEYLON 


281 


li 


1918,  while  shipments  of  coir  fiber,  rope,  and  yarn  showed 
a  50  per  cent  increase  in  quantity  and  a  100  per  cent  in- 
crease in  value.  These  products  were  manufactured  in  119 
factories  throughout  the  island.  As  a  whole  the  Ceylon 
coconut  production  is  bound  to  be  low  for  some  time,  as 
low  prices  have  discouraged  new  plantings  and  proper  fer- 
tilizing and  cultivated  areas  have  actually  decreased. 

Cacao.— Cacao  exports  increased  from  72,000  hundred- 
weight, valued  at  $585,000,  in  1917  to  73,000  hundred- 
weight, valued  at  $760,000,  in  1918.  The  United  Kingdom, 
Australia,  the  Philippines,  and  JapRan  were  the  largest 
buyers.  The  area  under  cultivation  remains  stationary  at 
22,000  acres,  although  there  is  a  tendency  to  sacrifice 
cacao  acreage  for  rubber.  There  are  five  chocolate  fac- 
tories in  Ceylon  and  indications  point  to  their  expansion. 

Cinnamon. — Cinnamon  exports  rose  from  29,000  hun- 
dred-weight, valued  at  $310,000  in  1917  to  37,000  hundred- 
weight, valued  at  $430,000,  in  1918,  going  largely  to  the 
United  Kingdom  and  the  United  States.  Cinnamon  quills 
represented  70  per  cent  of  the  exports,  the  balance  being  in 
chips.  There  has  been  little  change  in  the  acreage.  Cinna- 
mon oil  exports  in  1918  doubled  to  320,000  ounces,  valued 
at  $49,000. 

Citronella  (Lemon-Grass)  Oil.— There  was  a  decrease 
in  exports  of  citronella  oil  of  100,000  hundredweight  to 
1,030,000  hundredweight  in  1918  and  of  $100,000  to  $280,- 
000.  The  largest  purchasers  were  the  United  Kingdom 
and  the  United  States. 

Tobacco. — Exports  of  tobacco  in  the  form  of  cigars  and 
chewing  tobacco  increased  in  1918  from  the  3,400,000 
pounds  of  1917,  valued  at  $216,000,  to  4,700,000  pounds 
valued  at  $290,000.  The  J<)ffra  District,  with  6,600 
acres  under  cultivation,  is  the  chief  producing  district. 
At  present  the  principal  market  for  cigars  outside  of  Cey- 
lon itself  is  India  and  for  chewing  tobacco,  Cochin  China 


and  the  Malay  States.    An  attempt  is  being  made  to  culti- 
vate a  tobacco  suitable  for  the  European  market. 

Other  Products. — Areca  nut  exports  increased  from 
154,000  hundredweight,  valued  at  $95,000,  in  1917  to  214,- 
000  hundredweight,  valued  at  $1,230,000,  in  1918.  They 
are  shipped  to  nearby  points  exclusively. 

Cardamon  exports  increased  in  quantity  from  3,300 
hundredweight  to  3,500  hundredweight  but  declined  in 
value  from  $120,000  in  1917  to  $98,000  in  1918.  This 
product  is  grown  in  marshy  ground  and  on  hillsides  below 
6,000  feet  altitude,  both  in  Sinhalese  villages  and  on 
estates. 

The  cultivation  of  castor  seed  for  oil  has  been  begun  in 
Ceylon  owing  to  the  restrictions  placed  upon  its  exporta- 
tion from  India  to  Ceylon.  About  135  acres  were  planted 
in  1918  and  a  yield  of  700  pounds  of  seed  per  acre  was 
expected. 

The  high  price  of  imported  rice  from  India  has  encour- 
aged rice  cultivators  to  take  up  lands  which  had  not  been 
cultivated  for  some  time.  Rice  mills  have  been  established 
in  several  districts.  Larger  areas  have  been  planted  in 
food  products  in  every  district.  Manioc,  sweet  potatoes, 
and  plantains,  together  with  maize,  beans,  and  dry  grains 
are  all  being  grown  in  increasing  quantities  to  meet  the 
food  shortage. 

Plumbago. — The  exports  of  plumbago  showed  a  notable 
drop  from  26,000  tons  valued  at  $7,000,000,  in  1917  to 
15,000  tons,  valued  at  $1,570,000,  in  1918.  Fifty-five  per 
cent,  mostly  better  grades,  went  to  the  United  States,  the 
remainder  to  the  United  Kingdom.  Many  of  the  mines 
are  worked  in  a  primitive  fashion,  but  some  employ  modern 
machinery.  The  product  is  subject  to  fluctuating  demand 
from  Europe  and  America  because  of  competition  with 
Madagascar  plumbago  and  Korean  graphite.  Ceylon  can 
produce  30,000  tons  of  plumbago  a  year,  but  the  actual 


I  ^^ 


./ 


282 


TRADING  WITH  ASIA 


MARKET  ANALYSIS  OF  CEYLON 


283 


I 


production  in  1918  was  slightly  over  12,000  from  263 
mines  employing  6,400  men. 

Market  Analysis 

The  import  trade  of  Ceylon  suffered  a  slight  decline  from 
$60,000,000  in  1917  to  $57,000,000  in  1918.  Of  this  total 
40  per  cent  was  with  India,  20  per  cent  with  Burma,  16 
per  cent  with  the  United  Kingdom,  five  per  cent  with 
Japan,  five  per  cent  with  British  Africa,  four  per  cent 
with  the  Straits  Settlements,  three  per  cent  with  the 
United  States,  two  per  cent  with  Sumatra,  and  five  per 
cent-  with  other  countries. 

Rice.— Ceylon's  imports  of  rice  in  1918  of  6,400,000 
hundredweight,  valued  at  $17,000,000,  amounted  to  30  per 
cent  of  the  total  import  trade.  These  figures  were  1,300,- 
000  hundredweight  under  the  1917  imports,  whose  value 
was  $19,000,000,  and  were  considerable  below  the  average 
imports  of  rice  in  recent  years.  This  was  due  to  the  pro- 
hibition of  rice  exports  from  southern  India  owing  to  crop 
failures.  As  a  result  Ceylon  imports  in  1918  were  placed 
under  a  licensing  system,  which  with  high  freight  rates 
raised  the  price  considerably.  This  situation  has  shown 
that  Ceylon  must  become  less  dependent  upon  imported  rice 
and  with  this  in  view  the  Government  undertook  a  cam- 
paign of  education  in  1918,  distributed  seeds,  and  took 
steps  to  utilize  irrigable  crown  lands  now  allowed  to  lie 
fallow.  At  the  same  time  an  effort  will  be  made  to  increase 
the  yield  of  rice  per  acre  which  is  now  very  low. 

Cotton  Piece  Goods.— From  a  total  of  $4,530,000  in  1917 
piece  goods  imports  in  Ceylon  increased  in  1918  to  $5,060,- 
000.  Over  90  per  cent  of  this  total  was  supplied  by  the 
United  Kingdom  and  British  possessions. 

Dyed  goods  imports  increased  from  15,000,000  yards  in 
1917  to  19,000,000  yards  in  1918,  while  blea(;hed  .goods  im- 
ports fell  from  12,000,000  yards  in  1917  to  9,000,000  yards 


in  1918.  Printed  goods  also  experienced  a  drop  of  from 
6,000,000  yards  in  1917  to  3,000,000  yards  in  1918,  while 
gray  goods  jumped  from  2,200,000  yards  in  1917  to  3,000,- 
000  yards  in  1918. 

Metals  and  Metal  Ware. — The  imports  of  metal  and 
metal  ware  were  $2,600,000  in  1918,  being  the  same  as  the 
1917  imports.  Thirty-two  per  cent  of  these  imports  came 
from  the  United  States,  chiefly  hoop  iron,  nails  and  rivets, 
cast  steel,  hardware,  and  galvanized  barb  wire ;  31  per  cent 
came  from  Burma,  mostly  pig  lead  and  lead  for  tea  chests ; 
24  per  cent  came  from  the  United  Kingdom;  six  per  cent 
came  from  Japan ;  and  seven  per  cent  came  from  all  other 
countries. 

Sugar. — Sugar  imports  in  1918  were  415,000  hundred- 
weight, 10,000  more  than  1917,  with  a  value  of  $2,300,000 
or  $100,000  over  the  1917  values.  Java  and  Sumatra  were 
the  chief  suppliers. 

Fertilizers. — Fertilizer  imports  increased  from  900.000 
hundredweight,  valued  at  $16,000,000,  in  1917  to  1,300.000 
hundredweight,  valued  at  $2,100,000,  in  1918.  They  con- 
sisted of  nitrate  of  soda,  whale  bone,  guano,  fish,  and  pea- 
nut cake,  and  practically  all  came  from  British  India. 

Coal. — Colombo  being  a  bunkering  station,  imports  of 
coal  reach  considerable  proportions.  The  1918  imports  of 
218,000  tons  were  much  less  than  the  1917  figure  of  311,- 
000  tons,  although  the  value  rose  from  $3,300,000  to  $4,- 
000,000.    India  supplies  most  of  the  coal  imported. 

Kubber.— Trade  in  rubber  amounted  to  $2,000,000  in 
both  1917  and  1918  although  the  quantity  brought  in  rose 
from  3,500,000  pounds  to  5,500,000  pounds.  Though  Cey- 
lon is  a  large  exporter  of  rubber,  this  import  trade  is  the 
result  of  the  Colombo  market  being  the  assembling  place 
for  shipments  originating  in  India. 

Petroleum  Products. — Imports  of  petroleum  products 
rose  from  $2,050,000  in  1917  to  $2,150,000  in  1918.    Liquid 


284 


TRADING  WITH  ASIA 


™' 


fuel  imports  showed  the  most  notable  gains,  rising  from 
6,600,000  gallons  to  11,800,000  gallons,  while  kerosene 
dropped  from  4,200,000  gallons  to  3,900,000  gallons  and 
gasoline  from  800,000  gallons  to  600,000  gallons.  Lubri- 
cating oils  also  showed  a  decline  of  from  300,000  to  200,000 
gallons.  Dutch  Borneo,  Persia,  and  Sumatra  supplied  the 
bulk  of  the  imports  and  the  decline  in  kerosene  imports 
which  were  the  lowest  of  any  year  since  the  war  repre- 
sented decreased  case  oil  shipments  from  the  United  States. 

Motor  Cars.— Motor  cars,  of  which  590  had  been  brought 
in  in  1916,  fell  to  126  in  1917  and  15  in  1918,  because  of  the 
imposition  of  a  100  per  cent  import  duty  in  February, 
1917.  This  duty  was  removed  early  in  1919  and  a  re- 
newed trade  in  automobiles  and  trucks,  largely  from  the 
United  States,  should  result. 

Other  Imports. — Among  other  manufactured  articles 
imported  in  1918,  many  of  which  could  be  supplied  by  the 
United  States,  were  haberdashery  worth  $800,000,  ream 
paper  worth  $500,000,  acids  worth  $300,000,  chemicals 
worth  $300,000,  machinery  worth  $350,000,  and  cigarettes 
worth  $430,000. 

Questions 

1.  Name  Ceylon's  best  tea  customers  and  describe  the  methods 

used  in  growing. 

2.  How  does  the  popularity  of  rubber  planting  affect  Ceylon 

economically? 

3.  Name  three  other  products  of  Ceylon,  giving  the  buyers  of 

each. 

4.  How  is  the  Government  of  Ceylon  encouraging  rice  growing? 
6.  Name  three  imports  of  Ceylon  in  which  America's  sales  could 

be  increased. 


BIBLIOGRAPHY  TO  PART  III 
British  India,  Burma  and  Ceylon 


AiiLEK^  J.  G. : 

A  Narrative  of  Indian  History.    London  and  New  York, 

1900. 

Archer,  William : 

India  and  the  Future.    New  York,  1918. 
BOGGESS,  A.  C. : 

First  Days  in  India.    New  York,  1912. 
Bruce,  Richard  K. : 

The  Forward  Policy  and  Its  Results.    London  and  New 
York,  1900. 
Bryce,  J.  R. : 

The  Making  of  British  India.    London  and  New  York,  1915. 
Campbell,  Rev.  William : 

British  India.     London,  1839. 
COATES,  W.  H. : 

The  Old  "Country  Trade"  of  the  East  Indies.    London,  191L 
Crane,  Walter: 

India  Impressions.    New  York,  1907. 
CuRZON,  George  M.,  First  Baron : 

Lord  Curzon  in  India,    London  and  New  York. 
Elphinstone,  M.  : 

The  History  of  India  (Hindu  and  Mahetan  period).    Lon- 
don, 1911. 
Elwin,  E.  F.  : 

India  and  the  Indians.     London,  1913. 
Fisher,  Fred: 

India's  Silent  Revolution.    New  York,  1918. 
Fuller,  Sir  B. : 

The  Empire  of  India.     London,  1913. 
Gilllat,  Edward: 

Heroes  of  Modem  India.    London,  1910. 

285 


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BIBLIOGRAPHY 


287 


li|l 


Griffin,  Rev.  Z.  F. : 

India  and  Daily  Life  in  Bengal.    Philadelphia  and  Boston, 
1912. 
Hardee,  J.  Kier: 

India — Impressions  and  Suggestions.    New  York,  1900. 
Havell,  Ernest  B.  : 

History  of  Aryan  Rule  in  India.    New  York,  1918. 
HoLDiCH,  Sir  Thomas: 

The  Gates  of  India.     London,  1910. 
Hunter,  Sir  W.  W. : 

India.    New  York,  1916. 
Keene,  H.  G.  : 

History  of  India.    Edinburgh,  1906. 
Lajpat,  Raya: 

Political  Future  of  India.    New  York,  1918. 
Lajpat,  Raya : 

England's  Debt  to  India.    New  York,  1917. 
McPherson,  David: 

History  of  European  Commerce  with  India.    London,  1912. 
MoRisoN,  Theodore: 

The  Economic  Transition  in  Irhdia.    New  York,  1911. 
Mukerjee,  H.: 

Foundation  of  India  Economic,    London,  1918. 
MuNSON,  Arley : 

Kipling's  India.    New  York,  1915. 
Murray,  John : 

Handbook   for    Travelers   in    India,   Burma,    and    Ceylon, 
London,  1913. 
Newcombe,  a.  G.  : 

Village,  Town  and  Jungle  Life  in  India.    Edinburgh  and 
London,  1905. 
Ram,  R.  B.: 

India  Problems.    London,  1911. 
Rapson,  R.  J. : 

Ancient  India.     Cambridge,  1914. 
Rawlinson,  H.  G.: 

Indian  Historical  Studies.    London  and  New  York,  1913. 
Rees,  J.  D. : 

The  Heal  India.    Boston  and  Tokyo,  1910. 
Shoemaker,  M.  M.  : 

Indian  Pages  and  Pictures.    London,  1912. 
StrecheYj  Sir  John : 

India — Its  Administration  and  Progress.    New  York,  1911. 


Surridge,  Victor: 

India.    London  and  Edinburgh,  1909. 
Thompson,  Lt.  Col.  S.  J. : 

The  Silent  India.    Edinburgh  and  London,  1913. 
TiBLY,  A.  W.: 

British  India,  1600-1826.    London,  1911. 

TozER,  H.  J. : 

British  India  and  Its  Trade.    London  and  New  York,  1902. 
Vamberry,  a.  : 

The  Coming  Struggle  for  India.    London,  1885- 
Ware,  Mary  S. : 

The  Old  World  Thru  Old  Eyes.    New  York  and  London, 
1917. 
YOUNGHUSBAND,  Sir  G.  J. : 

The  Story  of  the  Guides.    New  York,  1911. 


*! 


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PART  IV 


MALAYSIA,  FRENCH  INDO-CHINA,  AND  SIAM 


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ll 


CHAPTER  XIX 


HISTORY  AND  GOVERNMENT  OF  MALAYSIA 

The  history  of  the  growth  of  British  power  in  Malaysia 
is  bound  up  with  the  extension  of  British  influence  and 
control  in  India.  The  council  at  Madras  decided  upon 
Priaman,  on  the  West  Sumatran  Coast,  rather  than  Ben- 
coolen,  as  the  first  settlement,  because  of  the  large  pepper 
shipments  received  by  the  East  India  Company  from  that 
vicinity  and  in  1685  established  a  ** factory''  there.  The 
fact  that  the  Dutch  had  already  arrived  at  Priaman  prob- 
ably influenced  the  first  British  ships  to  sail  by,  attrib- 
uting their  action  to  adverse  winds.  But  the  Company, 
not  foreseeing  such  disobedience  to  their  orders,  had  de- 
spatched the  supplies  and  stores  from  home  to  Priaman 
and  this,  together  with  the  unhealthy  location,  caused  much 
suffering,  sickness,  and  death  in  the  new  post  at  Bencoolen. 
But  despite  all  discomforts  the  small  band  of  traders  held 
out  and  thus  saved  from  Dutch  domination  and  influence  a 
large  portion  of  Malaysia  and  established  nearer  the  source 
of  production  the  Company 's  outposts  for  the  control  of  the 
pepper  trade.  The  attempts  to  control  pepper  production 
through  agreement  with  local  chiefs  to  purchase  all  pro- 
duced at  a  fixed  rate  required  disciplinary  measures,  with 
the  result  that  fortifications  and  garrisons  added  greatly  to 
the  overhead  expense  of  the  ^'factory."  But  with  all  this 
effort  at  control,  the  Company  could  not  combat  the  in- 
herent love  of  ease  of  the  native,  and  the  greater  leisure 
which  gambler  cultivation  promised,  with  equally  lucra- 
tive return,  had  in  a  hundred  years  practically  ruined  the 

pepper  trade  with  this  region. 

291 


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TRADING  WITH  ASIA 


The  Ponnding  of  Penang.  -Realizing  that  if  British  com- 
mercial influence  in  India  were  to  be  retained,  a  source 
of  supply  in  Malaya  must  be  maintained,  the  Supreme 
Government  in  India,  after  restoring  British  authority  in 
1761  as  a  result  of  the  successful  French  attack  on  Ben- 
eoolen  of  the  preceding  year,  decided  to  make  it  a  first 
class  station.    But  because  of  its  unhealthy  location  and 
the  resulting  scarcity  of  population  the  proposition  was 
abandoned  in  1785  and  the  colony  disappeared  completely. 
A  search  for  a  new  settlement  had  already  been  begun,  and 
due  to  the  farsighted  and  courageous  wisdom  of  Francis 
Light,  a  representative  of  a  large  number  of  Madras  mer- 
chants, whose  relations  with  the  King  of  Kedah  were  most 
cordial,  the  Company  accepted  from  the  King  the  grant  of 
the  Island  of  Penang  and  Light  was  sent  in  1786  as  super- 
intendent of  the  new  colony.    In  return  for  the  use  of  the 
Island  the  Company  granted  the  King  $30,000  and  agreed 
to  advance  necessary  ammunition  and  men  to  defend  the 
King  against  any  enemies  that  might  threaten  the  destruc- 
tion of  his  kingdom.    After  four  years  Light  had  built  a 
large  town  and  considerably   beautified  the  Island,   and 
when,  in  1790,  the  King  of  Kedah  had  prepared  an  expedi- 
tion on  the  mainland  for  the  purpose  of  recovering  the 
Island,  Light  attacked  and  scattered  it  and  forced  the 
King  to  cede  the  Island  in  perpetuity,  in  consideration  of 
a  subsidy  of  $6,000.     Ten  years  later,  in  return  for  an  ad- 
ditional subsidy  of  $4,000,  territorial  rights  over  Province 
Wellesley  on  the  mainland  were  given  to  the  Company. 
Thus  the  importance  of  Penang,  which  the  death  of  Light 
in  1794  and  the  capture  of  the  new  port  of  Malacca,  on  the 
Straits,  from  the  Dutch  in   1795  had  temporarily  over- 
shadowed, obtained  a  new  significance  and  in  1805  it  was 
made  a  Presidency. 

The  Establishment  of  Singapore.— The  original  inten- 
tion of  the  British  conquerors  of  Malacca  was  to  destroy 


HISTORY  OF  MALAYSIA 


293 


this  Dutch  post  and  with  it  all  Dutch  commercial  influ- 
ence in  the  Straits,  but  a  young  official,  Thomas  Stanford 
Raffles,  who  was  destined  to  play  a  leading  role  in  the  later 
occupation  of  the  Dutch  East  Indies,  saw  the  strategic  ad- 
vantage of  retaining  a  British  trading  post  at  that  place. 
He  based  his  plea  on  the  faith  of  the  20,000  natives  in  the 
protection  of  the  British,  adroitly  adding  that  Malacca 
had  always  proven  a  profitable  station.  The  post  was  re- 
tained and  later,  when  the  British  policy  of  permanent 
trade  centres  in  Malaya  was  decided  upon,  the  importance 
of  a  post  farther  to  the  south,  as  the  means  of  keeping  open 
the  trade  with  China,  was  recognized  and  Raffles  was  dele- 
gated to  carry  out  these  plans. 

The  Island  of  Singapore  was  chosen  after  much  recon- 
noitering  and  many  vicissitudes,  including  the  difficulty  of 
obtaining  assistance  and  supplies  from  Penang,  and  in 
February,  1819,  a  treaty  with  the  elder  brother  of  the 
reigning  Sultan  of  Johore  transferred  the  Island  to  British 
sovereignty  in  return  for  British  support  of  the  claims  of 
the  aspirant  to  the  throne,  who  claimed  to  have  been 
wrongfully  excluded  from  succession.  Considerable  oppo- 
sition to  this  move  now  arose  at  home  and  necessitated  many 
eloquently  penned  appeals  on  the  part  of  Raffles  to  resist 
the  prior  claims  to  the  island  by  the  Dutch.  Finally,  in 
1824  the  controversy  was  settled  by  agreement  between  the 
British  and  Dutch  Governments  in  Europe  and  British 
rights  in  Singapore  were  recognized.  Realizing  the  neces- 
sity of  reviving  the  trade  of  Singapore,  Raffles  made  it  a 
free  port,  with  the  object  to  drawing  to  it  the  trade  of  a 
wide  area,  and  a  free  port  it  has  since  remained,  its  mag- 
nificent growth  as  a  transshipping  point  bearing  tribute  to 
the  wisdom  and  far-sightedness  of  its  founder. 

The  Creation  of  the  Post  of  "British  Eesident."—The 
early  policy  of  the  British  was  one  of  non-interference  with 
the  native  rulers  and  of  confining  their  activities  to  the 


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TRADING  WITH  ASIA 


possessions  of  the  Company.  But  the  continual  quarrels 
between  rival  princes,  the  growth  of  lawlessness  in  gen- 
eral, and  particularly  the  interference  with  commerce  by 
uncontrolled  native  pirates,  led  to  the  appointment  of  a 
British  commission,  in  1873,  under  Major  General  Sir  An- 
drew Clarke,  to  ascertain  the  condition^/of  affairs  in  each 
of  the  native  states,  with  the  view  to  appointing  British 
officers  to  reside  in  the  various  states,  with  the  consent  of 
the  native  rulers,  and  at  British  expense.  The  result  of  the 
visit  of  this  mission  was  tlie  Treaty  of  Pangkor  in  June, 
1874,  which  provided : 

1.  That  the  Sultan  receive  and  provide  a  suitable  residence 
for  a  British  officer,  to  be  called  Resident,  who  shall  be  accredited 
to  his  court  and  whose  advice  must  be  asked  and  acted  upon  in 
all  questions  other  than  those  touching  Malay  religion  and  cus- 
toms. 

2.  That  the  collection  and  control  of  all  revenues  and  the  gen- 
eral administration  of  the  country  be  regulated  under  the  advice 
of  these  Residents. 

The  chiefs  of  the  native  states  accepted  the  arrange- 
ment without  enthusiasm,  but  the  Sultan  of  Perak  resisted 
the  new  decree  and  threatened  to  kill  any  Resident  sent  to 
his  village.  When  the  British  Resident,  Mr.  Birch,  ap- 
peared, the  Sultan's  men,  true  to  their  word,  attacked  and 
killed  him.  An  expedition  of  2,000  British  troops  suc- 
ceeded in  enforcing  the  British  protectorate  after  experi- 
encing much  resistance.  The  Sultan  was  exiled  and  those 
who  had  ordered  the  attack  were  executed.  The  lesson  this 
taught  was  an  important  factor  in  strengthening  British 
prestige  in  the  peninsula.  In  1888  Pahang  came  into  the 
system  and  in  1895  nine  other  states  coalesced  under  Negri 
Sembilan  and  accepted  British  control.  The  States,  Perak, 
Selangor,  Negri  Sembilan,  and  Pahang,  were  formally  fed- 
erated in  1896  and  the  present  Federated  Malay  States 
formed  with  a  combined  area  of  27,000  square  miles  and  a 


HISTORY  OF  MALAYSIA 


295 


population  of  1,000,000  with  Kuala  Lumpur  in  Selangor 
as  capital.  Those  not  federated  are  Kedah,  Kelantan, 
Trangganu,  and  Johore,  but  the  British  claim  a  sphere  of 
influence  over  these  Non-Federated  States  as  well. 

The  Governor  and  the  Councils. — The  supreme  authority 
in  the  Crown  colony  of  the  Straits  Settlements,  including 
Singapore,  Penang,  Province  Wellesley,  Malacca,  and  Din- 
dangs,  is  in  the  hands  of  the  Governor,  who  is  assisted  by 
an  Executive  Council  composed  entirely  of  officials.  A 
Legislative  Council  on  which  non-officials  have  representa- 
tion, but  which  is  dominated  by  the  official  element,  sup- 
plements the  Executive  Council.  Due  to  the  diversity  of 
the  population  anything  resembling  a  representative  gov- 
ernment of  the  colony  would  not  be  found  practicable,  but 
with  the  growth  of  the  European  element  in  the  popula- 
tion in  recent  years,  a  less  rigid  system  of  Government 
will  probably  be  devised. 

The  Governor  of  the  Straits  Settlements  is  also  High 
Commissioner  of  the  Federated  and  Non-Federated  Malay 
States,  as  well  as  Governor  of  Cocos  Island,  Christmas 
Island,  Labuan  Island,  and  High  Commissioner  of  Brunei 
in  North  Borneo.  The  Chief  Secretary  is  the  principal 
British  official  in  the  Federated  Malay  States,  and  a  Fed- 
eral Council  of  native  rulers  and  their  British  advisers  cor- 
responds to  the  Legislative  Council  of  the  Straits  Settle- 
ments. The  Non-Federated  States  are  under  an  advisory 
system  whereby  the  British  official  acts  more  as  an  adviser 
than  a  legislator,  with  duties  that  are  semi-diplomatic. 

The  Judicial  System.— The  judicial  system  in  the 
Straits  Settlements  was  established  in  1760  when  a  charter 
was  granted  the  inhabitants  of  Bencoolen  granting  them 
the  authority  to  establish  a  Court  consisting  of  a  mayor  and 
nine  aldermen,  who  were  to  be  British  and  appointed  for 
life,  for  the  purpose  of  dealing  with  criminal  and  civil 
cases.    In  1807  a  Court  of  Judicature  was  established  by 


\ 


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TRADING  WITH  ASIA 


HISTORY  OF  MALAYSIA 


297 


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4 


charter  at  Prince  of  Wales  Island  and  from  this  date  the 
character  of  the  judiciary  in  the  Straits  took  on  a  more 
settled  character.  "When  Malacca  was  captured  the  Re- 
corder of  the  Judicature  held  court  there  and  by  letters 
patent  his  duties  were  extended  to  Singapore  and  Penang 
in  1826.  Later  a  Supreme  Court  was  established  in  Singa- 
pore and  now  consists  of  a  Chief  Justice  and  four  puisne 
judges  and  these  five  constitute  a  court  of  appeal  from 
whose  decision  appeal  lies  in  the  Privy  Council.  In  the 
Federated  Malay  States  the  administration  of  the  law  is  in 
the  hands  of  the  Chief  Judicial  Commissioner  and  two 
Commissioners,  who  together  form  a  Supreme  Court  at 
Kuala  Lumpur.  The  penal  law  is  based  on  the  Indian 
Code,  while  the  civil  procedure  code  is  based  on  the  Eng- 
lish Judicature  Acts. 

Local  Self-Govemment. — The  local  government  in  the 
colony  is  left  largely  in  the  hands  of  the  local  residents. 
In  1827  a  Committee  of  Assessors  was  appointed  to  Penang 
to  superintend  the  cleansing,  watching,  and  repairing  of 
the  streets  of  the  Settlement.  In  1829  a  similar  authority, 
set  up  in  Singapore,  was  charged  with  "making,  repair- 
ing, and  cleansing  the  roads,  streets,  bridges,  and  ferries 
and  the  removal  of  public  nuisances,'*  and  to  fulfill  for 
police  functions.  A  rate  of  five  per  cent  was  assessed  on 
all  houses  in  Singapore  for  this  purpose.  In  the  Federated 
States  local  ordinances  are  put  into  effect  with  the  consent 
of  the  Resident  or  his  representative,  and  in  the  Non- 
Federated  States  local  matters  are  left  to  the  native  gov- 
ernment. 

The  British  genius  for  retaining  actual  governmental 
control  while  relinquishing  the  petty  non-essentials  of  rou- 
tine administration  has,  perhaps,  displayed  itself  more 
clearly  in  the  government  of  the  Malay  States  than  in  any 
other  part  of  the  world.  Out  of  a  group  of  constantly  war- 
ring states  has  been  constructed  a  well  knit  and  stable  gov- 


ernment, under  whose  protection,  what  is  probably  the  most 
diverse  population  in  the  world  lives  in  peace  and  pros- 
perity. 

Questions 

1.  What  commercial  motive   actuated   the   British  East  India 

Company  in  establishing  trading  posts  in  Malaya  f 

2.  Describe  the  acquisition  of  Singapore? 

3.  What  led  to  the  assumption  of  Protectorates  over  the  native 

Malay  states  and  what  is  the  nature  of  this  protectorate? 

4.  Outlme  the  form  of  government  of  the  Federated  Malay 

States? 
6.  Describe  (a)  the  judicial  system. 

(6)  The  local  government. 


« 


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MARKET  ANALYSIS  OF  MALAYSIA 


299 


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CHAPTER  XX 

PRODUCTS   AND  MARKET  ANALYSIS   OP   MALAYSIA 

The  great  agricultural  development  of  Malaysia  has  been 
the  one  distinct  contribution  of  the  foreign  occupation  of 
the  peninsula.  "While,  of  a  total  population  of  1,036,999 
for  the  Federated  States  in  1911  only  3,284  were  Euro- 
peans, the  433,444  Chinese  outnumber  the  420,840  Malays. 
Energetic  Scotch  colonists  have  spared  neither  pains  nor 
capital  in  proving  that,  despite  many  handicaps,  the  coun- 
try could  be  made  to  produce  profitably  such  crops  as  were 
needed  at  home  and  could  only  be  grown  in  a  tropical 
land.  Chinese  adventurers  were  also  responsible  in  no 
small  degree  for  the  success  of  many  agricultural  ventures. 
Between  these  two  groups  of  Chinese  and  Europeans  the 
natives  were  coaxed  and  urged  to  engage  in  regular  work. 
As  for  the  handicaps,  the  ravages  of  wild  hogs,  deer,  and 
monkeys  upon  the  young  crops  of  coconuts,  betel  nuts, 
gambier,  and  pepper,  were  only  equalled  in  their  disas- 
trous effects  by  the  utter  indifference  of  the  officials  to  the 
great  projects  which  these  pioneers  had  visioned.  **  In- 
stead of  placing  the  whole  cultivating  population  on  a  fair 
equal  footing,''  says  one  writer,  **by  permitting  the  hold- 
ers of  grants  and  leases  to  commute  their  rents,  the  com- 
mutations were  fixed  at  unequal  and,  in  most  cases,  exces- 
sive rates.'*  Coffee  was  the  first  product  cultivated  but 
the  price  ultimately  fell  and  the  estates  were  not  able  to 
pay  expenses.  Such  products  as  tea  and  cinchona  could 
not  be  raised  because  of  the  peculiar  topographical  and 
climatic  conditions.     In  a  final  attempt  to  make  agriculture 

pay  the  planters  turned  to  Para  rubber. 

298 


Bubber. — ^For  many  years  after  the  introduction  of  the 
Para  rubber  tree  into  Europe  by  the  Spaniards,  there  was 
no  serious  effort  to  cultivate  plantation  rubber.     The  early 
British  settlers  at  Penang  had  reported  on  the  existence  of 
wild  rubber  there,  but  little  attention  was  paid  to  it.     With 
the  discovery  of  the  vulcanization  process  the  new  uses  of 
rubber  began  to  be  realized.    In  1876  the  first  shipment  of 
rubber  seeds  was  received  from  British  agents  in  Brazil 
from  which  2,800  seedlings  were  set  out  not  only  in  Malaya, 
but  in  Ceylon  and  other  tropical  British  colonies  of  the 
East.    The  fact  that  four  or  five  years  were  required  to 
bring  the  plant  to  the  producing  stage,  which  meant  the 
sinking  of  capital  in  land  and  labor  without  any  return 
during  that  period,  at  first  reacted  upon  the  development 
of  the  industry,  and  it  was  not  until  1895  that  the  rubber 
industry  had  passed  beyond  the  experimental  stage.    With 
the  promising  development  of  the  automobile  the  demand 
for  rubber  was  foreseen  and  many  estates  were  planted 
which  came  into  bearing  about  1904.     The  fall  in  coffee 
prices  also  had  some  effect  in  releasing  plantations  for 
rubber  at  this  time.    Virgin  ground  was  taken  up   in 
interior  regions  of  the  peninsula  where  no  white  man  had 
ever  penetrated,  forests  were  cleared,  roads  constructed  and 
permanent  buildings  erected.    The  seedlings  in  the  Singa- 
pore nurseries  were  now  called  for  not  only  by  Malay  plant- 
ers but  by  planters  from  all  over  the  world  and  some  9,- 
000,000   rubber   seeds   soon   were    distributed.     In    1911, 
11,118  tons  of  rubber  were  produced.     By  1915  the  exports 
from  Malaya  were  44,523  tons;  in  1916,  62,764  tons;  in 
1917,  79,831  tons;  in  1918,  78,283  tons;  and  in  1919,  106,- 
452  tons  valued  at  a  little  over  $107,000,000  were  exported. 
The  superiority  of  Malay  rubber  over  African  rubber  lies 
in  the  greater  purity,  there  being  only  a  one  per  cent  loss 
through  purification  of  the  Malay  product  as  against  a  20 
to  40  per  cent  loss  in  the  African  product,  and  while  the 


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TRADING  WITH  ASIA 


latter  has  remained  stationary  in  output,  the  Malay  pro- 
duction has  increased  beyond  the  greatest  expectations. 
The  evils  of  close  planting  are  beginning  to  be  understood, 
and  experience  has  shown  that  the  best  results  are  ob- 
tained by  allowing  fullest  development  of  the  tree,  in  which 
cases  the  later  supply  is  well  maintained  and  increases 
steadily  from  year  to  year.  While  definite  figures  are  not 
known  it  is  estimated  that  tapping  may  continue  for  40 
years  under  proper  conditions. 

The  British  Indian  Tamils  and  the  Chinese  constitute 
the  real  nucleus  of  the  labor  employed  on  the  plantations. 
The  Government  has  adopted  a  liberal  labor  policy  and  free 
influx  from  India  has  been  encouraged.  Many  of  the  labor- 
ers have  been  recruited  in  Madras  and  their  passage  to 
Malaya  is  defrayed  by  an  Immigration  Fund  raised  by  all 
rubber  planters  who  employ  Tamil  labor,  on  the  basis  of 
average  employment  of  Tamil  labor.  The  laborers  are  not 
obliged  to  repay  their  passage  and  many  leave  an  estate 
on  a  month's  notice.  The  greater  majority  of  them  have 
stayed  in  their  new  homes  and  the  Government  has  seen 
that  proper  housing,  water  supply,  and  sanitation  were  pro- 
vided, and  it  maintains  a  staff  of  inspectors  for  the  pur- 
pose. The  recent  commercial  use  of  rubberseed  oil,  which 
has  many  of  the  qualities  of  cottonseed  oil,  and  also  pro- 
vides a  cake  for  cattle  feeding,  forms  an  important  out- 
growth of  the  rubber  industry. 

Coconuts.— The  planting  of  coconuts  has  become  one  of 
the  leading  industries  of  Malaya.  While  it  has  not  at- 
tained anything  like  the  position  of  rubber  in  the  colony's 
agriculture,  the  steady  and  growing  demand  for  coconut 
oil  abroad,  as  well  as  the  increasing  number  of  uses  made 
of  copra  cake ;  the  coir  fibre,  the  rough  hair  like  substance 
of  the  outer  husk;  the  leaves,  for  basket  making;  and  the 
juice  of  the  blossoms,  for  sugar  or  fermented  drinks,  have 
all  increased  the  value  of  the  product.    In  1911  there  were 


MARKET  ANALYSIS  OF  MALAYSIA 


301 


142,774  acres  under  coconuts,  one-half  of  which  were  in  the 
Federated  State  of  Perak.  The  exports  of  copra  in  1915 
amounted  to  15,610  tons  valued  at  $1,043,000.  In  1919 
this  amount  had  risen  to  29,847  tons  and  the  value  to  $2,- 
918,000. 

Aside  from  these  two  there  are  few  agricultural  products 
which  contribute  materially  to  the  prosperity  of  Malaya. 
About  a  hundred  thousand  acres  are  devoted  to  rice  and 
padi,  but  most  of  this  is  consumed  locally,  only  2,000  tons 
being  exported  in  1919.  Some  coffee  and  sugar  are 
grown  but  the  exports  are  negligible.  About  1,300  tons 
of  areca  nuts  and  the  same  quantity  of  tapioca  are  shipped 
abroad  annually. 

Tin.— The  tin  and  gold  mines  of  the  peninsula  have  been 
worked  for  many  centuries,  first  by  Chinese  and  later  by 
Portuguese,  who  record  the  unbounded  riches  of  Pahang  in 
gold  deposits.  It  was  not  until  1903  that  the  Government 
of  the  Federated  Malay  States  appointed  a  geologist  to 
conduct  a  scientific  survey  of  the  country.  The  tin  ore  ex- 
ported within  recent  years  has  been  taken  almost  entirely 
from  alluvial  deposits.  The  Machi  tin  field  of  Pahang  is 
perhaps  the  most  characteristic  of  these.  At  Chin-Chin  in 
Malacca  and  Serandah  in  Selangor  the  ore  is  deposited  in 
small  lodes  under  the  soil.  In  1911  only  1,200  tons  of  tin 
ore  were  produced  by  lode  mining.  Until  the  Federated 
Malay  States  were  formed  the  favorite  method  of  working 
the  tin  mines  employed  by  the  Chinese  was  that  of  digging 
holes  in  the  surface  and  after  exhausting  the  supply  mov- 
ing on  to  another  area.  The  Kinta  Valley  in  Perak  and  the 
valley  of  the  Klang  River  near  Kuala  Lumpur  are  the  chief 
tin  producing  centres.  Here  most  of  the  tin  mined  in 
Malaya,  which  is  half  the  world's  production,  is  taken  from 
deposits  near  the  granite  foothills.  Open  cast  mining  is 
used  almost  exclusively.  This  is  simply  an  extension  of  the 
older  methods  employed  by  the  Chinese,  and  with  the  use 


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of  modern  hauling  machinery  the  mines  are  worked  to  a 
depth  of  100  feet  or  more.  The  tin-bearing  gravel  is  con- 
veyed by  hand  to  wash  boxes  where  the  tin  stone  is  sepa- 
rated by  raking  it  in  the  running  water.  Other  methods 
employed  are  the  hydraulic  or  sluicing  method,  the  under- 
ground workings,  and  dredging.  The  first  depends  upon 
the  water  supply  and  the  location  of  the  deposit  in  a  nar- 
row valley  in  the  hills  where  the  water  may  be  trained  upon 
it.  After  the  gravel  is  washed  down  suction  dredges  lift  it 
to  wooden  flumes  where  the  tin  ore  is  extracted.  Bucket 
dredges  have  been  used  in  parts  of  Kelantan  and  Perak. 
The  underground  method  is  least  popular  because  of  the 
heavy  charges  for  timbering  and  the  process  is  not  an 
exhaustive  one.  Many  underground  workings  abandoned 
as  exhausted  have  been  later  worked  on  the  open  cast 
principle  with  great  profit.  Large  smelters  of  the  Straits 
Trading  Company  at  Singapore  and  Prai  now  smelt  the 
ore  which  was  formerly  refined  at  the  mines.  The  Eastern 
Smelting  Company  at  Penang  also  is  equipped  with  mod- 
em devices,  but  notwithstanding  the  economical  and  effec- 
tive services  these  large  smelters  render,  some  of  the  Chi- 
nese miners  still  resort  to  the  primitive  blast  furnace.  All 
but  a  small  fraction  of  the  labor  employed  in  the  mines  is 
Chinese.  Where  the  miner  owns  the  land  he  usually  em- 
ploys the  labor  and  takes  all  the  profits  and  risk.  In 
some  cases  land  is  let  to  the  actual  laborers  who  pay  a 
fixed  return.  The  ** truck''  system,  formerly  employed, 
whereby  the  laborer  was  advanced  his  food,  cash,  and  nec- 
essaries and  in  return  was  under  obligations  to  work  until 
a  certain  delivery  had  been  made,  has  now  been  abolished. 
Under  the  present,  or  ** tribute,''  system  a  local  capitalist 
advances  the  necessary  money  for  food  and  stores  and  as- 
sumes the  risk  of  the  project  failing.  As  the  ore  is  mined 
it  is  turned  over  to  him  and  when  its  sale  is  effected  he 
adjusts  the  accounts  by  deducting  his  tribute  agreed  upon, 


and  placing  the  balance  to  the  credit  of  the  laborers.  This 
system  has  just  enough  element  of  chance  in  it  to  attract 
the  Chinese  entrepreneur.  The  exports  of  tin  have  in- 
creased from  4,893  tons  in  1915,  valued  at  $3,255,000,  to 
5,753  tons  in  1919,  valued  at  $5,892,000.  The  exports  of 
tin  ore  have  decreased  from  67,835  tons,  valued  at  $31,565,- 
000  in  1915  to  49,465  tons  with  an  increase  in  valuation  to 
$36,569,000.  The  difficulties  in  obtaining  the  necessary 
shipping  have  played  the  leading  part  in  reducing  the 
output.  Due  to  the  monopolistic  character  of  Malaya's 
position  in  the  tin  market,  the  Straits  Government  has  suc- 
cessfully collected  an  export  duty  on  tin  for  many  years 
which  annually  yields  it  many  millions  in  revenue. 

Other  Minerals.— About  250  tons  of  scheelite  and  235 
tons  of  wolfram  were  exported  in  1919.  The  mining  of 
gold  has  attracted  many  adventurers  from  Europe  and  the 
peninsula  is  dotted  with  abandoned  workings,  but  so  far 
only  the  Raub  Company,  an  Australian  concern,  has  had 
any  degree  of  success,  due  more  to  skill  in  application  of 
modem  mining  methods,  than  the  discovery  of  any  excep- 
tional deposits. 

Market  Analysis.— The  export  trade  of  the  Federated 
Malay  States  has  increased  from  $91,000,000  in  1915  to 
$155,000,000  in  1919.  Seventy  per  cent  of  this  latter  figure 
represented  rubber  and  28  per  cent  tin  and  tin  ore,  leaving 
only  two  per  cent  for  all  other  exports. 

The  import  trade  increased  from  $34,200,000  in  1915  to 
$67,830,000  in  1919.  Of  the  1919  imports,  27  per  cent  was 
rice  valued  at  $18,800,000,  which  is  a  considerable  increase 
in  value  over  the  $8,550,000  imports  of  1915,  although  the 
actual  tonnage  brought  in  dropped  from  208,000  tons  to 
187,000  tons  during  that  period.  Cigarettes  increased  in 
value  from  $800,000  in  1915  to  $2,000,000  in  1919.  Sugar 
is  the  next  largest  import,  amounting  to  $1,880,000  in  1919 
while  petroleum  was  imported  to  the  value  of  $1,770,000 


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(     1      t 

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during  the  same  year.  Both  of  these  commodities  show  100 
per  cent  increases  in  import  value,  with  about  a  10  per  cent 
decrease  in  quantity  as  evidence  of  high  prices. 

Wheat  flour  valued  at  $1,710,000,  prepared  opium  worth 
$1,590,000,  tobacco  worth  $1,480,000,  condensed  milk 
worth  $1,330,000,  swine  worth  $1,140,000,  Kachang  oil 
worth  $1,100,000,  bran  valued  at  $970,000,  and  benzine 
worth  $912,000  are  among  the  other  leading  imports.  The 
import  trade  of  1919  may  be  divided  into  five  large  groups 
of  materials.  Of  these  the  first  group,  consisting  of  live 
animals,  food,  drink,  and  narcotics,  shows  a  total  value  of 
$41,000,000,  or  61  per  cent  of  the  total;  the  second  group, 
including  all  metals  and  metal  manufactures,  totals  $7,240,- 
000  in  value,  or  11  per  cent  of  the  total  import  trade ;  the 
third  group,  consisting  of  miscellaneous  manufactured  arti- 
cles, shows  a  valuation  of  $6,840,000,  or  10  per  cent  of  the 
import  trade;  the  fourth  group,  composed  of  textiles, 
amounts  to  $6,100,000,  or  nine  per  cent;  the  fifth  group, 
containing  miscellaneous  raw  materials,  is  valued  at  $6,- 
050,000,  or  nine  per  cent. 

The  import  trade  of  the  Federated  Malay  States  offers 
an  attractive  field  for  American  exporters.  With  over  half 
the  import  trade  consisting  of  foodstuffs,  such  as  cakes, 
crackers,  hams,  lard,  preserved  vegetables,  beans  and  peas, 
preserved  fruits,  etc.,  there  is  no  reason  why,  with  the  evcF 
increasing  prosperity  of  the  colony,  our  manufacturers  of 
these  commodities  could  not  share  in  the  trade.  The  metal 
and  metal  manufactures  group  contains  such  items  as  iron- 
ware, tramway  and  railway  materials,  engines,  boilers  and 
parts,  motor  cars,  tools,  instruments  and  implements,  steel, 
hardware  and  cutlery,  and  other  items  which  play  a  large 
part  in  our  export  trade.  Under  miscellaneous  manufac- 
tured articles  chemicals,  rubber  tires,  stationery,  and  paper 
and  paper  goods  are  among  the  items  which  we  could  sup- 
ply to  advantage.     In  textiles,  the  fourth  group,  cotton 


prints,  dyed  goods,  plain  goods,  sarongs,  slendangs  and 
kains,  foreign  apparel,  hosiery  and  millinery,  might  all  be 
supplied  by  the  United  States,  while  under  raw  materials, 
besides  petroleum,  benzine,  and  Kachang  oil,  which  are 
largely  supplied  from  the  Dutch  East  Indies,  lubricating 
oils  are  indicated  as  being  a  potential  item  of  import  from 
this  country.  Proper  methods  of  distribution  and  an  un- 
derstanding of  the  peculiar  desires  of  the  natives,  both  of 
which  ends  can  only  be  brought  about  by  establishing 
American  import  and  export  houses,  are  necessary  in  order 
to  obtain  and  hold  this  trade. 

Questions 

1.  (a)  What  policy  discouraged  the  early  planters  in  Malayaf 
(h)  Describe  the  introduction  of  rubber  planting  and  the 

growth  of  the  industry.     What  labor  policy  is  pur- 
sued?   With  what  success? 

2.  What  are  the  uses  of  coconuts  and  the  extent  of  the  coconut 

industry  in  Malayaf 

3.  Review  the  development  of  the  tin  industry  in  Malaya. 

4.  Give  the  percentages  of  the  total  export  trade  of  Malaya  in 

rubber  and  tin. 

5.  What   are   the   principal   imports   of  Malaya   and   indicate 

their  relative  importance? 


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HISTORY  OF  FRENCH  INDO-CHINA 


307 


h.  ./ 


^ 


CHAPTER  XXI 

HISTORY  AND   GOVERNMENT  OF  FRENCH   INDO-CHINA 

In  1861  the  French  acquired  the  colony  of  Cochin  China 
by  conquest,  but  it  was  not  until  1896  that  the  colony  was 
finally  pacified  and  placed  under  an  effeclive  colonial  gov- 
ernment.   In  1884  Tonkin  was  made  a  French  Protecto- 
rate, but  the  administration  of  the  French  was  so  weak  and 
Frenchmen  showed  such  reluctance  in  emigrating  to  the 
colony  and  in  developing  its  industries,  that  the  history 
of  the  French  in  Indo-China  until  1896  was  one  in  which 
military   and   administrative   problems   overshadowed   all 
commercial  considerations.    From  1887  to  1895  the  French 
Indo-China  Government  cost  the  French  Government  40,- 
000,000  francs  and  the  colonial  venture  had  cost  France  a 
total  of  750,000,000  francs  from  the  time  of  the  first  conquest 
in  1861  to  1895.     In  1896  a  colonial  loan  of  80,000,000 
francs  was  raised  to  discharge  pressing  obligations  and  to 
construct  needed  public  works.    The  failure  of  French  ad- 
ministration was  not  hard  to  explain.     The  oflScials  were 
transferred  direct  from  the  Home  Service,  rather  than 
trained  in  the  colony  and  military  and  naval  officers  were 
often  appointed  to  executive  posts  who  possessed  no  knowl- 
edge of  colonial  government  and  were  ignorant  of  the  lan- 
guage of  the  country.    Political  infiuence  in  Paris  rather 
than  efficient  service  in  the  colony  was  the  basis  of  pro- 
motion.   In  1893  France  was  exercising  a  merely  nominal 
protectorate  over  Annam  and  Cambodia,  and  no  French  ad- 
ministration had  been  introduced  into  these  two  States. 
Laos  had  just  been  acquired,  but  Tonkin  was  still  under 

military  protection,  although  a  civil  government  had  been 

806 


instituted  seven  years  before.    Moreover,  the  foreign  trade 
of  the  colony  was  nearly  all  under  the  control  of  foreign. 

ers. 

The  Success  of  Doumer. — In  December,  1896,  M.  Paul 
Doumer,  leader  of  a  radical  wing  in  the  Chamber  of  Depu- 
ties, was  appointed  Governor  General  of  French  Indo- 
China  in  an  effort  to  get  him  out  of  French  politics  at 
home.     The  reforms  which  he  proposed  were  as  follows: 

1.  The  creation  of  a  suitable  financial  policy. 

2.  The  pacification  of  Tonkin. 

3.  The  organization  of  a  Government  General. 

4.  The  completion  of  reforms  of  the  Protectorate. 

5.  The  extension  of  French  influence  in  China  and  Siam. 

The  success  of  his  administration  is  shown  by  the  re- 
markable commercial  growth  of  the  colony  by  1902.  Dur- 
ing the  ten  years  from  1893  to  1902  the  foreign  trade  of 
the  colony  increased  from  162,000,000  francs  to  400,000,000 
francs,  of  which  France's  share  increased  from  less  than 
one-fifth  to  more  than  one-third.  The  exports  doubled  in 
value  and  the  value  of  exports  to  France  in  1902  was  nearly 
four  times  as  large  as  in  1893. 

The  Reorganization  of  the  Government. — This  remark- 
able growth  was  brought  about  largely  by  reforms  in  ad- 
ministration. The  Government  General  was  reorganized 
on  the  principle  of  governing  the  whole  of  Indo-China,  but 
leaving  the  administration  to  the  Kesident  Superiors  in  the 
Protectorates.  The  Superior  Council  of  Indo-China  was 
re-created  and  endowed  with  legislative  powers.  It  con- 
sists of  the  Governor  General,  the  military  and  naval  com- 
manders in  French  Indo-China,  the  Secretary  General  of 
Indo-China,  the  Lieutenant  Governor  of  Cochin  China,  and 
the  Resident  Superiors  of  the  four  Protectorates.  In  ad- 
dition to  these  officials  the  heads  of  departments  in  the 
Government  General,  the  President  of  the  Colonial  Coun- 
cil of  Cochin  China,  the  Presidents  of  various  Chambers  of 


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Commerce,  four  natives,  and  the  Chief-of-Cabinet  of  the 
Governor  General.  This  body  has  charge  of  the  general 
and  local  budgets  and  advises  the  Governor  General  on  lo- 
cal legislation.  It  is  divided  into  four  committees;  one 
on  military  and  naval  affairs,  public  works,  railways,  com- 
merce, and  agriculture ;  a  second  on  legislation  and  admin- 
istrative organization;  a  third  on  budgets;  and  a  fourth  on 
finance. 

The  Executive  Adminigtration.— The  executive  branch 
of  the  Government  General  consists  of  the  following  ser- 
vices :  military  and  naval ;  civil  affairs ;  finances ;  excise  and 
customs;  public  works;  agriculture  and  commerce;  and 
posts,  telegraphs  and  telephones.  The  Cabinet  of  the 
Governor  General  consists  of  four  bureaus,  one  covering 
political,  one  administrative,  one  military,  and  one  secre- 
tarial matters.  The  French  Government  General  is  more 
elaborate  than  the  Goveniment  of  the  Federated  Malay 
States  and  its  one  distinctive  feature  is  the  legislative  body. 

The  Budget  System. — A  budget  system  was  devised  in 
1898  on  the  principle  that  money  from  indirect  taxes  should 
go  to  the  general  government  of  French  Indo-China  while 
direct  taxes  should  be  levied  to  carry  on  the  local  govern- 
ments. This-  assignment  of  revenue  resulted  in  1904  in 
65,000,000  francs  being  turned  over  to  the  Government 
General  and  only  32,000,000  being  assigned  to  the  local 
Governments. 

The  Judicial  System.—In  1898  a  Supreme  Court  of  Ap- 
peal was  established  for  the  whole  of  French  Indo-China, 
which  consists  of  three  Chambers,  one  Chamber  under  a 
Vice-President  and  two  Counsellors  sitting  at  Hanoi.  The 
criminal  court  is  composed  of  magistrates  of  another  Cham- 
ber who  sit  with  four  assessors  selected  from  50  of  the  lead- 
ing residents.  Another  Chamber  of  the  Court  of  Appeal 
composed  of  three  counsellors  and  two  mandarins  reviews 
the  cases  from  the  native  courts,  where  the  Annamite  code 


HISTORY  OF  FRENCH  INDO-CHINA 


309 


is  administered  by  local  mandarins  and  then  decisions  sub- 
mitted to  the  Resident  Superior  for  approval.  Mixed 
courts  of  commerce  are  held  at  Hanoi  and  Haiphong  and 
are  composed  of  a  presiding  judge  and  two  judges  elected 
by  the  Chambers  of  Commerce. 

Railroad  Development. — The  railroad  from  Haiphong 
across  the  Chinese  border  into  Yunnan  is  a  remarkable 
tribute  to  the  energy  and  foresight  of  Governor  General 
Doumer,  but  this  actual  achievement  is  only  one  of  a  num- 
ber of  projects  in  French  Indo-China  involving  an  expendi- 
ture of  400,000,000  francs  and  contemplating  the  construc- 
tion of  about  2,000  miles  of  railroad.  The  program  contem- 
plated, will  connect  Saigon  with  Hanoi,  Savanakek  on  the 
Mekong  River  with  Kwantai  on  the  coast,  Ouinhone  with 
Kontoum,  and  will  open  up  Southern  Annam,  and  connect 
Saigon  with  Bankok.  Only  700  miles  of  road  were  actually 
needed,  but  Doumer  insisted  upon  a  larger  program  and 
200,000,000  francs  were  finally  appropriated  for  the  fol- 
lowing lines : 

1.  From  Haiphong  to  Hanoi  and  on  to  Chinese  border. 

2.  From  the  Chinese  border  to  Yunnan. 

3.  From  Hanoi  to  Vinh  on  the  coast. 

4.  From  Tourane  to  Hue  and  Kwangtu. 

5.  From  Saigon  to  Khan-hoa  on  the  coast  and  to  Liang- 
bian  on  the  interior  plateau. 

6.  From  Mytho  to  Vinhlong  on  the  Mekong  River. 

The  Present  Government. — In  the  five  years  ending  1904 
France  actually  received  40,000,000  francs  in  military  con- 
tribution from  the  colony ;  the  administration  of  justice  had 
been  immeasurably  improved ;  the  Protectorates  were  effec- 
tively governed;  and  the  general  prestige  of  the  colony 
had  been  raised.  The  present  government,  though  far  from 
being  a  model  colonial  government  and  possessing  many 
faults,  is  still  a  great  achievement  in  the  face  of  changing 
political  conditions  at  home.    The  French  have  gone  to 


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great  expense  to  beautify  the  cities  of  Hanoi,  Haiphong, 
and  Saigon  with  public  buildings  and  good  roads  have  been 
constructed  throughout  the  colony.  The  investment  of  pri- 
vate French  capital  in  Indo-China  has  been  a  difficult  mat- 
ter to  bring  about.  What  private  capital  is  there,  has  been 
induced  to  come  through  guarantees  of  State  support. 
But  notwithstanding  this  backwardness  of  the  French 
toward  colonizing  their  Far  Eastern  possessions,  the  Gov- 
ernment General  seems  unwilling  to  adjust  the  customs 
and  other  regulations  so  as  to  permit  other  nations  to  un- 
dertake the  development  which  only  private  initiative  can 
give. 

QlTESTIONS 

1.  "Why  was  the  French  Government  of  Indo-China  unsuccess- 

ful until  1896? 

2.  What  reforms  did  M.  Doumer  institute  and  what  were  the 

results  ? 

3.  Outline  the  legal  system  of  French  Indo-China. 

4.  What  is  the  extent  of  railroad  development f 

5.  Enumerate  some  of  the   achievements  and   shortcomings  of 

present  French  colonial  administration  in  Indo-China. 


CHAPTER  XXII 

PRODUCTS  AND  MARKET  ANALYSIS  OP  FRENCH  INDO-CHINA 

With  a  population  of  16,000,000,  25,000  of  which  are 
Europeans,  mostly  French,  the  Delta  people  of  French 
Indo-China,  or  Annamites,  constitute  79  per  cent  of  the 
population.  The  principal  industry  is  agriculture,  al- 
though mining  has  been  developed  within  recent  years. 
The  total  area  is  256,000  square  miles,  but  lack  of  trans- 
portation has  retarded  the  development  of  the  mountain 
regions,  such  as  those  of  Laos.  The  delta  regions  of 
Cochin-China  and  Tonkin  are  the  principal  agricultural 
districts,  containing  respectively  4,000,000  and  250,000 
acres.  Forests  cover  28,000,000  acres  and  furnish  great 
opportunities  for  development. 

Rice. — As  in  Siam,  the  predominant  product  of  French 
Indo-China  is  rice.  The  normal  production  is  2,200,000 
tons,  of  which  1,000,000  tons  is  consumed  at  home,  leaving 
1,200,000  tons  for  export.  Practically  all  of  this  export- 
able surplus,  about  1,000,000  tons,  is  raised  in  Cochin- 
China  ;  the  balance,  about  200,000  tons  comes  from  Tonking. 
Of  this  tonnage  about  50  per  cent  is  normally  shipped  to 
Hongkong  where  it  is  transshipped  to  Japan,  Europe,  and 
elsewhere;  Japan  alone  takes  400,000  tons  of  Indo-China 
rice  through  Hongkong.  Of  this  20  per  cent  is  shipped 
direct  to  France,  10  per  cent  to  Singapore,  10  per  cent  to 
the  Philippines,  eight  per  cent  to  the  Dutch  East  Indies, 
and  the  balance  of  two  per  cent  is  shipped  direct  to  Europe. 
Japan,  with  its  constantly  increasing  population  and  its 
growing  importance  as  a  manufacturing  nation,  is  coming 

to  depend  more  and  more  upon  French  Indo-China  and 

311 


312 


TRADING  WITH  ASIA 


JLK 


)n 


m 
m 


Siam  to  make  up  the  ever  increasing  deficit  in  her  rice  pro- 
duction, and  crop  failures  in  French  Indo-China  which  re- 
duce the  exportable  surplus  20  or  30  per  cent,  as  in  1919, 
are  of  serious  consequence  to  Japan. 

Rubber. — The  cultivation  of  rubber  has  been  started  on 
an  extensive  scale  during  the  war.  Nearly  3,000,000  trees 
exist  in  the  colony  and  while  their  production  is  still  insig- 
nificant, a  production  of  only  389  tons  being  officially  re- 
corded, planting  is  proceeding  at  a  good  pace  and  the  1917 
trees  will  soon  begin  to  bear.  At  Saigon  an  official  rubber 
laboratory  has  been  planted  as  a  branch  of  the  local  Pas- 
teur Institute  and  rubber  culture  is  being  encouraged  by 
the  recently  established  Scientific  Institute  of  Indo-China. 
The  development  of  the  colony  as  a  source  of  rubber  supply 
is  probably  one  of  the  most  significant  agricultural  under- 
takings in  the  Orient. 

Coconut  and  Vegetable  Oils.— Another  agricultural  de- 
velopment of  the  colony  of  commercial  importance  is  the 
encouragement  of  the  growth  of  the  coconut  palm.  The 
normal  export  of  copra  before  the  war  was  7,000  metric 
tons,  most  of  which  was  shipped  to  France  and  was  pro- 
duced in  the  provinces  ot  Mytho  and  Bentre  along  the 
Mekong  River.  About  40,000  acres  were  devoted  to  coco- 
nuts before  the  war  and  by  1917  new  plantations  had  been 
set  out  not  only  in  the  coasjtal  regions,  but  throughout  the 
interior  of  Cochin-China.  Because  of  shipping  difficulties 
during  the  war  the  planters  have  had  to  market  their  prod- 
uct mainly  in  the  Orient,  and  this  has  had  a  decided  effect 
upon  production,  the  exports  falling  to  2,000  tons  in  1917. 
Much  of  this  went  to  Japan.  In  1917  an  oil  mill  for  crush- 
ing the  copra  and  producing  coconut  oil  was  established 
near  Saigon  with  a  capacity  of  2,000  tons.  It  is  estimated 
that  if  planting  proceeds  at  the  present  rate,  the  colony  will 
be  producing  France's  total  copra  requirements  in  20  years. 
About  40,000  acres  of  areca  nuts  are  now  bearing. 


MARKET  ANALYSIS  OF  FRENCH  INDO-CHINA      313 

Many  other  oil  bearing  plants  and  seeds  are  capable  of 
increased  production  in  the  colony.  Oil  from  cotton  seed, 
kajok  seed,  hemp  seed,  sesame  seed,  oil  palm  nuts,  castor 
beans,  and  rubber  seed  are  all  looked  to  as  of  great  future 
importance.  Manufacturers  of  oil  crushing  machinery 
should  find  an  opportunity  here  in  the  future  for  the  sale 
of  their  machinery. 

Other   Agricultural   Products.— Peas,    maize,   tobacco, 
sugar  cane,  bananas,  cotton,  and  silk  have  all  been  cultivated 
on  a  small  scale  but  to  an  ever  increasing  degree.    Peas  and 
maize  form  staple  food  crops  for  the  natives  of  the  interior. 
Tobacco  cultivation  has  increased  steadily  as  evidenced  by 
the  tax  receipts  which  increased  50  per  cent  from  1911  to 
1916.    From   the    12,000   acres   planted    in   sugar   cane, 
4,200  tons  of  sugar  were  produced  in  1917,  60  per  cent  in 
Giadinh  Province,  and  30  per  cent  in  Bienhoa  Province. 
By  more  intensive  methods  it  is  thought  that  at  least  15,000 
tons  may  be  produced  in  this  area,  since  in  the  older  col- 
onies from  two  to  four  tons  are  produced  per  acre.    Of  the 
678  native  sugar  mills  which  exist  in  the  colony,  544  are  in 
Bienhoa  Province.     Silk  culture  centres  in  Culao-gieng  and 
Cho-moi   Provinces  and  has  made  satisfactory  progress. 
The  establishment  of  a  silk  reeling  industry  at  Tanchan  has 
offered  the  needed  encouragement  to  growers. 

Mining.— In  1918  there  were  218  different  mining  con- 
cessions granted  in  Indo-China,  91  per  cent  of  which  were 
for  zinc,  63  for  coal,  30  for  tin  and  tungsten,  12  for  gold 
and  the  balance  for  copper,  antimony,  lead  and  silver,  iron 
and  mercury. 

The  coal  production  was  643,000  tons  in  1917  and  636,- 
000  tons  in  1918,  about  half  of  which  was  exported. 

Zinc,  which  is  mined  only  in  Tonking,  was  mined  to  the 
extent  of  39,000  tons  in  1917  and  28,000  tons  in  1918.  The 
ores  are  exported,  chiefly  to  Japan,  for  refining. 

Tin  and  tungsten  increased  in  production  from  519  tons 


m 


314 


TRADING  WITH  ASIA 


V-  ( 


p: 


/ 


in  1917  to  604  tons  in  1918,  the  latter  production  consist- 
ing of  218  tons  of  70  per  cent  wolfram,  263  tons  of  tungsten 
and  tin  ore  and  119  tons  of  60  per  cent  tin  ore. 

Industries. — ^Native  rice  hulling  mills  increased  in  num- 
ber from  1,691  in  1915  to  2.056  in  1916.  These  establish- 
ments vary  in  their  activity  with  the  size  of  the  rice  crop 
but  with  iQcreasing  acreage  their  number  is  growing.  Two 
electrically  driven  huUers  of  American  make,  with  a  ca- 
pacity of  three  tons  per  day,  have  been  installed  at  Saigon. 
Two  important  distilleries  exist  at  Cholon,  one  of  which 
produced  1,100,000  litres  of  alcohol  in  1916  and  the  other 
60,000  litres.  An  interesting  result  of  the  shortage  of 
aniline  dyes  is  the  reversion  to  the  native  indigo  and  other 
vegetable  dyes.  Several  new  establishments  of  this  kind 
were  set  up  during  the  war. 

Market  Analysis. — The  best  index  to  the  normal  foreign 
trade  of  French  Indo-China  is  furnished  by  the  1914  sta- 
tistics. These  show  a  total  export  trade  of  $66,000,000 
and  a  total  import  trade  of  $53,000,000.  Of  the  export 
trade  66  per  cent  originated  in  Cochin-China  and  33  per 
cent  in  Tonking,  leaving  only  one  per  cent  from  Annam, 
Cambodia,  and  Laos.  Of  the  import  trade  60  per  cent  was 
destined  for  Cochin-China  and  36  per  cent  for  Tonking, 
leaving  only  four  per  cent  for  other  dependencies.  In  the 
same  year  the  imports  from  France  and  French  Colonies 
amounted  to  40  per  cent  of  the  import  trade,  while  imports 
from  Hongkong  and  Singapore,  representing  transship- 
ments from  other  European  countries,  amounted  to  40  per 
cent.  The  imports  from  the  United  Kingdom  amounted  to 
two  per  cent  and  those  of  the  United  States  to  one  per  cent. 
During  the  war,  however,  the  lack  of  shipping  cut  down 
France's  share  of  the  imports  to  20  per  cent  while  Hong- 
kong with  30  per  cent  and  Singapore  with  15  per  cent  made 
up  the  bulk  of  the  foreign  supply.  The  share  of  the  United 
Kingdom  and  the  United  States  has  not  increased  percep- 


MARKET  ANALYSIS  OF  FRENCH  INDO-CHINA     315 

tibly.  In  the  export  trade,  mostly  rice,  50  per  cent  is 
with  Hongkong,  20  per  cent  is  with  France,  10  per  cent 
with  Singapore,  10  per  cent  with  the  Philippines,  eight  per 
cent  with  the  Dutch  East  Indies,  and  two  per  cent  direct 
with  Europe.  Deducting  the  products  of  Oriental  origin 
for  native  consumption,  France  in  normal  years  supplies 
the  colony  with  90  per  cent  of  the  imported  manufactured 
goods,  such  as  cotton  piece  goods,  clothing,  hosiery,  canned 
goods,  etc.  This  is  insured  by  a  preferential  tariff  sys- 
tem. During  the  war  France  has  not  been  able  to  supply 
all  the  goods  desired  and  these  have  been  brought  in  from 
other  sources,  but  the  preferential  arrangement  still  exists. 
Even  with  this  handicap,  American  firms  should  be  able  to 
get  a  large  share  of  the  business  in  such  goods  as  France 
must  import  from  America  and  re-ship  to  French  Indo- 
China.  This  is  also  true  of  many  lines  which  France  does 
not  normally  produce. 

The  best  method  of  merchandising  in  French  Indo-China 
and  the  one  which  has  proven  most  successful  is  the  use  of 
the  general  store.  Such  an  establishment  should  engage  in 
both  import  and  export  trade,  own  rice  mills  to  supply 
their  own  rice  for  export,  and  retail  such  articles  above 
enumerated  that  find  a  ready  sale.  Several  European 
firms,  including  before  the  war  many  German  firms,  fol- 
lowed this  method  of  selling  with  great  success,  many  of 
them  purchasing  their  supplies  in  France.  In  this  manner 
intimate  relations  with  all  the  established  industries  of  the 
country  may  be  created  and  the  sale  of  American  products, 
while  small  in  the  aggregate,  would  increase  as  the  indus- 
trial and  agricultural  development  of  the  country  proceeds. 

Questions 

1.  In  what  states  of  Indo-China  is  the  population  and  agricul- 
tural development  centred? 


(1 


316 


TRADING  WITH  ASIA 


ii 


h 


'i 


'.M' 


m 


II 


2.  What  is  the  production  and  export  of  rice  and  the  chief 

countries  of  destination  T 

3.  (a)  How  has  rubber  cultivation  been  encouraged? 

(6)  Outline  the  effects  of  the  war  on  coconut  production. 
4  (a)  Name  the  principal  mineral  products. 
(6)  The  leading  industries. 

(a)  How  has  the  war  affected  France's  share  of  the  import 
trade? 

(6)  Who  are  the  principal  buyers  of  Indo-China  products? 


5. 


4 


CHAPTER  XXIII 

HISTORY  AND  GOVERNMENT  OF  SIAM 

Siam's  shadowy  claim  to  suzerainty  over  the  Kingdom  of 
Malacca  brought  her  in  first  contact  with  the  Portuguese. 
These  adventurers  of  the  West  had  subsequently  penetrated 
to  Ayuthia  and  had  been  found  fighting  on  both  sides  dur- 
ing the  Burmese-Siamese  wars,  while  in  1548  three  Portu- 
guese ships  were  destroyed  in  the  defense  of  that  ancient 
capital.  Early  in  the  seventeenth  century  Portuguese  mis- 
sionaries were  given  land  for  churches  in  Ayuthia  and  oth- 
erwise favored.  At  the  same  time  the  vanguards  of  Eng- 
lish and  Dutch  commerce  reached  Siam  and  a  struggle  for 
the  King's  favor  and  resulting  trade  began.  In  1619  Eng- 
lish and  Dutch  trading  vessels  fought  a  battle  in  Patani 
roads.  In  1634  the  Dutch  had  established  a  fortified 
'^factory'*  at  Ayuthia  and  in  1641  when  the  Dutch  took 
Malacca  from  Portugal,  the  downfall  of  Portuguese  influ- 
ence in  Siam  was  completely  accomplished. 

Influence  of  the  Dutch. — Pursuing  their  usual  policy,  the 
Dutch  devoted  themselves  entirely  to  trade  and  took  no  part 
in  Siamese  politics.  In  1664  the  first  treaty  between  any 
foreign  power  and  Siam  was  signed  with  representatives  of 
the  Dutch  East  India  Company.  The  temperament  of  the 
Dutch  was  too  phlegmatic  and  their  aims  too  grasping,  how- 
ever, and  in  1706,  as  a  result  of  a  rupture  with  the  Govern- 
ment, they  withdrew  their  factory. 

The  Rise  of  Faulkon. — ^Under  the  guidance  of  Constan- 

tine  Faulkon,  a  French  sailor,  who  rose  to  be  a  trusted 

advisor  of  the  King,  Siam  now  granted  many  privileges 

to  the  English  and  French  East  India  Companies  and  the 

S17 


» 


I 


318 


TRADING  WITH  ASIA 


'; 


1 


King  himself  embarked  upon  a  mercantile  career  which 
proved  very  profitable.  Meanwhile  the  Dutch  were  assum- 
ing a  threatening  attitude  in  Malacca  and  the  King,  to  pro- 
tect himself  from  this  new  menace,  garrisoned  the  ports  of 
Bangkok  and  Mergui  with  French  troops  and  kept  a  body- 
guard of  French  troops  about  his  person.  This  aroused 
the  Siamese,  who  fearing  the  ever  increasing  influeaice  of 
France,  rose  in  rebellion,  deposed  the  King,  and  killed 
Faulkon. 

The  War  with  Burma.— In  1765  the  city  of  Ayuthia, 
after  a  six-year  war  with  Burma,  was  captured  and  de- 
stroyed and  the  Burmese  were  prevented  from  pushing  their 
conquest  farther  by  a  threatened  Chinese  invasion.  In  the 
meantime  the  Siamese  were  given  an  opportunity  to  col- 
lect their  scattered  forces  and  not  only  regained  the  terri- 
tory lost,  but  were  strengthened  enough  to  push  on  and 
invade  Cambodia  to  the  east.  After  another  unsuccess- 
ful attempt  to  conquer  Siam,  Burma  was  finally  repulsed 
and  the  wars  between  the  two  states,  which  had  continued 
intermittently  for  many  centuries,  came  to  an  end  in 
1792.  As  a  result  of  her  conquest,  Siam  had  come  to  re- 
gard Cambodia  as  her  territory,  but  in  1809  this  was  dis- 
puted by  the  King  of  Annam  and  after  a  brief  campaign 
an  agreement  between  Siam  and  Annam  was  reached,  ced- 
ing that  part  of  Cambodia  containing  the  ruins  of  the 
ancient  capital  of  Angkor  to  Siam. 

The  First  Treaty.— In  1821  the  British  Bast  India  Com- 
pany sent  an  envoy  to  the  Siamese  Court  for  the  purpose  of 
making  a  treaty  but  without  results.  In  1826,  however, 
Captain  Bumey  concluded  a  treaty  between  Great  Brit- 
ain and  Siam  providing  for  the  settlement  of  petty  dis- 
putes, the  mutual  surrender  of  criminals,  a  definition  of 
spheres  of  influence  on  the  Malay  Peninsula,  and  the  free- 
dom of  trade.  In  1833  the  United  States  signed  a  treaty 
providing  for  the  treatment  of  American  citizens  coming  to 


HISTORY  OF  SIAM 


319 


Siam  but  the  King  refused  both  the  British  and  the  Ameri- 
cans the  right  to  send  consuls. 

The  Accession  of  King  Mongkut.— In  1851  Prince  Mong- 
kut,  who  had  been  deprived  of  his  rightful  inheritance  of 
the  throne,  was  invited  to  rule.  The  Prince  had  spent  his 
time  to  the  age  of  forty-seven  in  seclusion,  studying,  among 
other  things,  the  English  language,  mechanics  and  other 
sciences,  practically  unknown  in  Siam,  and  "Western  sys- 
tems of  government.  The  new  King  did  much  to  encour- 
age intercourse  with  the  West  as  well  as  to  further  the  wel- 
fare of  his  people.  In  1855  Sir  John  Bowing  negotiated  a 
new  treaty  between  Great  Britain  and  Siam,  introducing 
the  extraterritorial  system  and  providing  for  the  appoint- 
ment of  a  British  Consul  and  the  exercise  by  that  official  of 
civil  and  criminal  jurisdiction  over  all  British  subjects  in 
Siam.  These  subjects  were  given  the  right  to  buy  or  rent 
land  within  a  belt  of  territory  extending  from  four  to  40 
miles  from  the  capital  in  all  directions.  The  rates  of  tax- 
ation were  fixed,  as  well  as  import  and  export  duties  and 
the  rights  of  British  subjects  to  travel  and  trade  through- 
out the  Kingdom  were  secured.  Similar  arrangements  were 
made  with  France  and  the  United  States^  the  following 
year  and  with  other  European  powers  in  succeeding  years. 

1  On  December  16,  1920,  a  new  treaty  of  commerce  and  navigation 
was  signed  between  the  United  States  and  Siam.  The  treaty  follows 
in  large  part  the  usual  lines  of  treaties  of  commerce  and  navigation 
between  the  United  States  and  other  countries.  Full  fiscal  autonomy 
is  granted  Siam  and  a  protocol  is  annexed  to  the  treaty  under  which 
the  United  States  surrenders  extraterritorial  jurisdiction  over  Ameri- 
can citizens  in  Siam,  reserving  the  right  of  evocation  for  a  period  of 
five  years  from  the  date  on  which  the  treaty  comes  into  force.  This 
action  follows  proposals  made  some  years  af»o  that  extraterritorial 
jurisdiction  be  surrendered  by  the  United  States,  Great  Britain,  and 
other  leading  powers.  Great  Britain,  by  its  treaty  with  Siam  signed 
in  or  about  1910,  surrendered  her  extraterritorial  rights.  Negotia- 
tions were  renewed  with  the  United  States,  but  the  breaking  out  of 
the  war  in  1914  and  other  causes  brought  about  a  temporary  suspen- 
sion of  the  negotiations  which  were  not  again  taken  up  until  1919. 
An  exchange  of  notes  was  also  effected  by  which  the  titles  to  Ameri- 
can missionary  property  owned  in  Siam  are  quieted. 


i 


320 


TRADING  WITH  ASIA 


HISTORY  OF  SIAM 


321 


1 1 


i'ti 


The  French  in  Cambodia.— In  1863  the  King  of  Cam- 
bodia made  treaties  with  both  France,  now  in  control  of 
Annam,  and  Siam,  in  whicli  they  both  pledged  themselves 
to  protect  Cambodia.  In  return  both  expected  to  conduct 
the  foreign  policy  of  Cambodia,  neither  knowing  until  later 
of  the  existence  of  the  other  treaty.  After  four  years  of 
negotiations  Siam  abandoned  her  rights  in  Cambodia  in 
favor  of  France. 

Progress  under  King  Chulalonkorn.— The  King  now  de- 
voted himself  to  encouragement  of  canal  digging,  road  con- 
struction, and  ship  building,  while  the  introduction  of 
printing  opened  the  way  to  better  education.  On  his  death 
in  1868  he  was  succeeded  by  the  father  of  the  present  mon- 
arch, King  Chulalonkorn,  who  abolished  slavery,  estab- 
lished law  courts,  and  reformed  the  fiscal  administration 
and  the  military  service.  Communications  were  improved 
and  trained  officials  replaced  the  .former  chieftains  with 
the  result  that  the  various  races  and  clans  were  welded  to- 
gether into  a  firmly  established  and  homogenous  nation. 
These  reforms  were  not  accomplished,  however,  without 
great  opposition  on  the  part  of  the  upper  classes  who  reluc- 
tantly gave  up  their  ancient  privileges  only  after  much 
opposition. 

Siam  as  a  "Buflfer**  State.— As  a  result  of  a  border  dis- 
pute France  and  Siam  once  more  encountered  difficulties 
resulting  in  the  occupation  of  the  approaches  of  the  River 
Menam  by  French  gunboats  and  the  dictation  of  a  humiliat- 
ing treaty  by  France,  to  insure  the  enforcement  of  which 
France  established  a  military  occupation  of  Chantaburi. 
The  position  of  Siam  now  became  desperate  and  England, 
anxious  to  maintain  a  ** buffer"  state  between  her  own  and 
French  possessions,  intervened  and  after  negotiations  with 
France  concluded  an  agreement  in  1896  guaranteeing  the 
autonomy  of  Siam.  In  1909  a  treaty  was  concluded  be- 
tween Great  Britain  and  Siam  whereby,  in  abolishing  her 


extraterritorial  rights,  Great  Britain  obtained  suzerainty 
over  15,000  miles  of  former  Siamese  territory  on  the  Malay 
Peninsula  with  a  population  of  nearly  one  million,  as  well 
as  the  right  to  make  a  loan  for  railroad  construction  on 
the  Peninsula. 

The  Executive  Government. — The  present  executive  Gov- 
ernment of  Siam  consists  of  the  King,  under  whom  are  ten 
chief  Departments.  These  are  the  Departments  of  For- 
eign Affairs,  War,  Interior,  Finance,  Royal  Household, 
Justice,  Public  Works,  Public  Instruction,  Agriculture,  and 
the  Ministry  of  the  Capital.  The  Sovereign  presides  at 
the  meetings  of  these  officials,  known  as  the  Executive 
Council,  acting  as  his  own  Prime  Minister  and  exercising 
the  veto  power.  A  Legislative  Council  composed  of  the 
most  influential  men  in  the  state  considers  all  laws  before 
they  become  effective. 

The  Judicial  System.— With  the  establishment  of  the 
Ministry  of  Justice  in  1892  the  following  courts  were  or- 
ganized: two  magistrates'  courts,  a  central  criminal  court, 
a  civil  court,  a  court  of  foreign  causes,  for  dealing  with 
foreign  subjects,  a  court  of  appeal,  and  a  Supreme  Court 
of  Appeal.  Each  of  the  provinces  is  provided  with  a  Court, 
from  which  appeal  lies  with  a  Special  Court  of  Appeal  of 
the  Provinces  at  Bangkok,  whence  final  appeal  can  be  made 
to  the  Supreme  Court.  Efforts  are  being  made  to  raise  the 
standard  of  personnel  of  the  judiciary  and  every  year  a 
dozen  or  so  young  graduates  from  the  Law  School  go  out 
to  take  the  minor  judicial  positions,  relieving  the  older  of- 
ficials. An  effort  is  already  being  made  to  codify  the  law, 
bringing  it  more  into  harmony  with  Western  law,  so  that 
extraterritoriality  may  be  abolished  by  the  other  nations 
as  it  has  been  by  the  British.  This  work  is  under  the  super- 
vision of  a  French  Legislative  Adviser  who  is  engaged  in 
the  general  codification  to  include  the  Penal  Code,  the 
Criminal  Procedure  Code,  the  Civil   Code,  the  Code  of 


if 


'    i 


^T     ..-r 


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TRADING  WITH  ASIA 


HISTORY  OF  SIAM 


323 


'!!i 


1. 1, 


Civil  Procedure,  the  Commercial  Code,  and  a  Law  of  Ju- 
dicial Organization. 

The  Encouragement  of  Education. — The  Ministry  of  Ed- 
ucation is  divided  into  two  Departments,  the  Educational 
Department  and  the  Ecclesiastical  Department.  Under  the 
supervision  of  the  former  are  three  classes  of  schools: 

1.  Government  schools  maintained  at  Government  ex- 
pense. 

2.  Local  schools  maintained  partly  or  wholly  by  local 
subscriptions. 

3.  Private  schools. 

In  addition  to  maintaining  its  own  schools,  the  Educa- 
tional Department  has  set  up  model  primary  and  secon- 
dary schools  in  the  Provinces  and  established  local  normal 
schools  to  provide  teachers.  Courses  of  instruction  have 
also  been  drawn  up  which,  while  giving  considerable  lati- 
tude to  the  local  authorities,  dictate  the  minimum  require- 
ments that  a  scholar  shall  be  able  to  read,  write,  make 
simple  calculations,  and  have  some  knowl(*dge  of  his  own 
country,  and  some  vocational  training.  The  number  of 
Government  schools  has  increased  from  247  in  1913  to  451 
in  1917  and  the  scholars  from  20,712  to  34,525  in  the  same 
period.  The  local  schools  have  increased  from  3,144  to 
3,299  durino:  this  period  and  the  scholars  from  88,936  to 
144,693.  In  addition  to  the  primary  and  secondary  schools 
the  Government  maintains  six  colleges:  the  Civil  Service 
College,  with  a  total  enrollment  of  273  in  1917 ;  the  Law 
College,  with  1,281;  the  Military  College,  with  767;  the 
Naval  College,  with  128;  the  Police  School,  with  84;  and 
the  Post  and  Telegraph  School  with  24. 

The  Railroads. — The  state  railways  of  Siam  are  divided 
into  a  Northern  Line  from  Bangkok  to  Pre  and  a  Southern 
Line  from  Bangkok  down  the  Peninsula  to  the  Malaya 
border  where  connection  is  made  with  Singapore.  The 
Northern  Line,  with  a  total  capital  outlay  of  59,262,432 


ticals  in  1917,  has  shown  a  consistent  increase  in  annual 
earnings  of  from  54,564  ticals  in  1897  when  first  operated 
to  2,963,606  ticals  in  1917.     The  total  goods  tonnage  during 
the  latter  years  was  367,461,  of  which  rice  accounted  for 
112,835  tons,  stone  50,140  tons,  timber  28,767  tons,  pack- 
ages 24,729  tons,  merchandise  12,552  tons,  and  charcoal 
13,265  tons,  all  other  commodities  totaling  125,173  tons. 
The  livestock  tonnage  on  the  Northern  Line  included  118,- 
204  pigs,  13,097  head  of  horned  cattle,  and  a  total  of  133,- 
475  head  of  live^ock.     There  were  2,568,926  passengers 
carried  in  1917,  practically  all  of  which  were  third  class. 
The  Southern  Line  with  a  total  capital  outlay  of  46,578,- 
025  ticals  in  1917  has  shown  a  much  smaller  increase  in  net 
earnings  of  from  245,246  ticals  in  1904  to  703,725  ticals  in 
1917.    The  goods  tonnage  was  smaller,  amounting  to  145,- 
692  tons  of  which  20,032  tons  were  packages,  13,221  tons 
rice,  7,746  tons  timber,  and  the  other  classifications  in 
much  smaller  amounts.     Out  of  a  total  of  38,137  head  of 
livestock  carried,  21,241  were  pigs  and  9,033  homed  cat- 
tle.   The  passenger  trafiSc  was  1,661,111  for  1917.    The 
through  connection  with  Malaya  will  probably  show  greater 
tonnage  and  earnings  on  this  line  for  1918  and  succeeding 
years. 

Questions 

1.  Describe  the  eariy  influence  of  the  Dutch  and  French  in 

Siam. 

2.  What  was  the  significance  of  Prince  Mongkut's  early  training? 

3.  What  was  the  reason  for  British  interference  in  the  border 

dispute  between  Siam  and  France? 

4.  Outline  the  present  executive  Government  and  the  judicial. 

5.  Describe  the  growth  of  pubHc  education  and  railway  develop- 

ment. 


i 


IN 


MARKET  ANALYSIS  OF  SIAM 


325 


't 


CHAPTER  XXIV 

PBODUCTS    AND    MARKET   ANALYSIS    OF    8IAK 

Practically  the  whole  of  Siam's  8,149,487  population  is 
dependent  upon  aprriculture  and  fishing  for  livelihood. 
During  the  hot  season  when  the  ground  is  baked  and  un- 
tillable  and  during  the  wet  season  when  storms  prevent 
sea  fishing,  other  occupations  engage  some  of  the  people, 
but  these  are  of  a  minor  character  and  include  boat  build- 
ing, pottery,  brick  making,  silk  growing,  etc.  The  immi- 
grant Chinese  have  developed  such  small-scale  industries  as 
rice  milling,  distilling,  sugar  refining,  mining,  and  forestry 
and  they  also  dominate  the  retail  trades  and  minor  occu- 
pations of  shoemaker,  tailor,  carpenter,  tinsmith,  carriage 
builder,  bricklayer,  shopkeeper,  and  pawnbroker.  The  na- 
tive Siamese  is  by  custom  of  long  standing  either  a  farmer 
or  a  fisher,  and  the  more  lucrative  trades  are  thus  easily 
taken  over  by  others. 

Rice.— In  1918  of  Siam's  total  acreage  of  5,552,240  acres, 
5,492,600  acres  were  planted  in  rice.  The  only  other  crops 
of  which  there  are  official  records  are  tobacco,  22,012  acres ; 
maize,  14,320  acres ;  cotton,  7,940  acres ;  pepper,  7,418  acres ; 
peas,  5,460  acres;  and  sesame,  1,442  acres.  Rice,  therefore, 
is  the  predominant  product  of  Siam  and  dominates  her  so- 
cial, political,  and  commercial  life.  It  constitutes  not  only 
the  principal,  but  the  sole,  staple  food  of  the  entire  popu- 
lation. Until  the  introduction  of  European  banking  meth- 
ods, the  only  means  of  investing  money  was  in  rice  fields 
and  nobles  were  graded  according  to  the  grants  of  rice 
land  from  the  King.  Rice  is  the  principal  subject  of  litiga- 
tion in  the  courts  and  the  prospects  of  the  next  harvest  the 


absorbing  topic  of  conversation.    It  is  the  cargo  of  the  river 
boats  on  the  Menam  River  and  of  the  ocean  liners  which 
load  at  Bangkok  and  from  it  the  Government  derives  almost 
all  of  its  revenue.     The  ancient  invasions  of  Siam  from 
Burma  and  Cambodia  were  actuated  by  the  desires  of  one 
ruler  to  obtain  the  rice  lands  of  the  other.     Rice,  therefore, 
is  now  and  always  has  been  the  great  staple  crop  of  Siam. 
There  are  four  species:  the  common  rice  of  lower  Siam; 
glutinous  rice,  grown  in  large  quantities  in  the  north; 
*'red''  rice,  so  named  because  of  its  dark  appearance  when 
boiled;   and   hill   rice,  grown   by  the  mountain   peoples. 
These  species  are  divided  into  as  many  as  a  hundred  dif- 
ferent varieties,  the  chief  distinguishing  characteristics  be- 
ing color,  size,  and  flavor.     The  common  rice  is  very  popu- 
lar in  districts  liable  to  irregular  rainfall  because  of  its 
peculiar  ability  to  stop  growing  after  reaching  a  certain 
size  in  the  nursery  and  remain  perfectly  healthy  until  the 
heavy  rains  come  to  soften  the  earth.     One   variety  of 
this  species  has  been  adapted  to  grow  at  an  accelerated 
pace  to  keep  above  the  rising  waters  when  heavy  floods 
occur.     The  straw  acts  as  a  float  and  keeps  the  head  of  the 
plant  above  the  water,  which  throws  out  lateral  shoots  and 
draws  added  nourishment  from  the  water.    A  crop  is  thus 
assured  no  matter  how  severe  the  flood  or  drought. 

The  rice  crop  is  harvested  with  sickles  and  reaping  knives 
and  the  sheaves  brought  to  the  winnowing  ground  on  light 
bamboo  sledges  drawn  by  the  plough  cattle,  which  are  also 
used  to  tread  out  grain  on  the  winnow  floor.  Winnowing 
is  performed  by  blowing  the  husks  and  chaff  away,  pour- 
ing the  grain  from  a  raised  platform  in  the  wind.  The 
common  farm  implements  used  consist  of  a  heavy  knife  with 
a  handle  at  right  angles  for  cleaning  long  grass  off  the  land ; 
a  plough  made  of  two  pieces  of  wood  bound  together  with 
cane  and  having  a  small  iron  share ;  a  cattle  drawn  harrow 
resembling  a  large  hay  rake,  upon  the  back  of  which  the 


f 


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326 


TRADING  WITH  ASIA 


MARKET  ANALYSIS  OF  SIAM 


327 


driver  stands;  a  planting  stick  used  where  the  water  is 
too  deep  for  planting  to  be  done  by  hand;  an  ordinary- 
hoe;  a  sledge  consisting  of  a  light  platform  mounted  on 
runners,  all  of  bamboo  and  used  in  the  lower  plain  where 
the  water  still  renders  the  soil  too  soft  for  the  wheels  of  a 
cart;  and  the  reaping  knife  which  varies  in  different  lo- 
calities. Many  attempts  have  been  made  to  introduce  mod- 
ern implements  for  the  cultivation  of  rice  and  some  iron 
ploughs  and  threshing  machines  have  b(ien  imported,  but 
they  have  not  been  favorably  received  by  the  conservative 
native.  Lately,  however,  the  Government  has  been  experi- 
menting with  a  tractor  which  would  work  satisfactorily  on 
hard,  baked  soil,  and  enable  the  farmer  to  plow  his  land 
earlier  than  is  now  the  case.  The  exports  of  rice  from 
Siam  have  averaged  about  1,272,000  short  tons  for  the  last 
five  years,  valued  at  about  $25,382,000,  although  the  quan- 
tity fell  in  1919  to  946,700  short  tons  while  the  value  rose 
to  $43,560,000.  The  principal  classes  exported  are  white 
rice,  white  broken  rice,  and  white  rice  meal. 

Tobacco. — While  not  entering  into  the  export  trade,  a 
comparatively  large  acreage  has  been  devoted  to  tobacco  for 
home  consumption.  Some  tobacco  is  cultivated  in  the  rice 
fields  during  dry  weather  but  the  best  crops  are  raised  in 
the  rich  alluvial  soil  in  the  upper  Menam  River.  The  pro- 
duction does  not  equal  the  demand  and  considerable  to- 
bacco is  imported.  Since  few  precautions  are  taken  to  pro- 
tect the  crops  from  insects,  it  is  often  lost  and  the  methods 
used  in  cultivation  are  so  crude  that  good  results  are  not 
obtained.  The  leaves  are  cut  into  coarse  shreds  and  ex- 
posed to  the  sun  on  mats  or  racks.  It  is  then  manufac- 
tured into  cigarettes  wrapped  in  lotus  flower  petals  for 
local  consumption. 

Maize. — This  crop  is  grown  in  small  garden  patches 
throughout  Siam  and  some  fields  are  devoted  to  its  growth. 
It  is  consumed  locally  and  often  dried  and  stored  for  feed. 


Cotton. — The  cotton  plant  was  probably  brought  from 
India  about  2,500  years  ago.  Several  varieties  of  the  spe- 
cies gossypium  herhaceum  are  grown  in  the  north,  but  with 
cheaper  cotton  goods  obtainable  from  abroad  its  cultivation 
is  declining.  The  plant  is  often  allowed  to  remain  in  the 
ground  two  or  three  years,  growing  six  or  eight  feet  high 
and  bearing  a  smaller  crop  each  year.  This  indifference  on 
the  part  of  the  farmer  leads  to  deep  rooting  of  the  plant 
and  necessitates  much  digging  to  clear  the  ground  of  roots. 
About  $30,000  worth  is  exported  overland  to  China  and 
Burma. 

Pepper. — ^Although  it  formed  a  leading  article  of  com- 
merce in  Siam  in  the  seventeenth  century,  which  had  a 
production  at  that  time  of  some  3,000  tons,  pepper  has 
declined  in  importance  in  recent  years,  due  to  uncertain 
markets  and  better  methods  employed  in  other  producing 
countries.  Its  cultivation  is  now  confined  to  the  littoral 
provinces  of  southern  Siam  and  is  largely  in  the  hands  of 
Chinese.  Its  cultivation  requires  much  care  and  it  is  an 
expensive  undertaking.  The  export  in  1918  amounted  to 
$368,610. 

Sesamum. — This  plant  is  grown  in  the  rice  fields  before 
planting  is  begun  and  on  the  high  lands,  but  is  not  exten- 
sively grown  on  the  lower  plains.  The  oil  is  extracted  from 
the  seed  by  rough  wooden  presses  worked  by  hand  or  bull- 
ock and  is  used  for  cooking.  The  seed  cake  is  fed  to  cattle 
and  is  used  as  a  fertilizer.    None  is  exported. 

Other  crops  include  coconuts,  which  grow  well  in  the 
sandy  soil  of  southern  Siam  and  are  little  affected  by  beetles 
as  in  central  Siam  where  the  coconut  trees  have  almost  dis- 
appeared. In  1918  $31,000  worth  of  copra  was  exported. 
Rubber  planting  has  only  recently  taken  place  in  Siam  due 
to  the  early  introduction  of  a  very  slow  growing  species 
which  led  to  the  erroneous  conclusion  that  rubber  could 
not  be  grown.    One  large  rubber  plantation  has  been 


If  I 


328 


TBADINO  WITH  ASIA 


started  in  southern  Siam  which  has  heen  fully  as  successful 
as  the  Malay  plantations.  Rubber  exports  totaled  $1.3,228 
in  1918.  Sugar  cane,  which  was  once  a  leading  export  crop 
of  Siam,  is  now  only  grown  for  local  consumption  and 
many  ruins  of  sugar  mills  testify  to  the  victory  of  beet 
sugar  over  the  product  of  Siam. 

Fisheries.— The  Buddhist  religion,  deprecating  the  de- 
struction of  animal  life,  and  the  proximity  of  Siam  to  the 
sea  have  perhaps  played  the  greatest  part  in  developing  the 
fisheries  of  Siam.  Fishing  is  now  thoroughly  regulated  by 
law  and  the  methods,  time,  and  places  for  fishing  are 
strictly  set  down.  Licences  are  granted  in  accordance 
with  the  kinds  of  nets  or  traps  used.  The  fish  when  caught 
are  dried,  cured,  and  pickled  and  also  made  into  a  sort  of 
fish  paste.  About  40,000  tons  of  fish  are  dried  and  cured 
annually  and  in  1919  11,600  tons  of  this  amount  were  ex- 
ported, mainly  to  Singapore.    The  1918  value  was  $426,343. 

Porestry.—Teak  wood  is  the  principal  forest  product 
entering  into  the  export  trade  and  $2,036,356  worth  of  this 
product  was  exported  in  1918.  The  teak  trade  was  begun 
in  1882  by  Britishers  who  were  working  teak  in  Burma, 
and  when  the  Siamese  Government  took  over  the  teak 
forests  of  northern  Siam  in  1895,  a  State  Forest  Department 
was  created  and  British  forest  officers  were  brought  from 
Burma  to  develop  scientific  forestry.  The  teak  tree  is 
girdled  near  its  base  two  years  before  it  is  actually  cut  down 
and  allowed  to  stand  and  season.  Four  British  firms  and 
one  Danish  firm  have  invested  about  $10,000,000  in  the  teak 
logging  industry  of  Siam,  taking  leases  from  the  Govern- 
ment. Elephants  haul  the  logs  to  the  nearest  stream  and 
they  are  floated  down  to  the  saw  mills  at  Bangkok.  Agila 
and  other  woods  were  exported  in  1918  to  the  value  of 
$490,973. 

Mines  and  Mining.— Ten  thousand  tons  of  tin  are  now 
mined  annually,  partly  from  hillside  deposits  and  partly 


MARKET  ANALYSIS  OF  SIAM 


329 


from  the  alluvial  deposits  of  southern  Siam.    The  Chinese 
have  long  dominated  the  industry,  but  up  to  20  years  ago 
had  received  little  aid  from  the  Government  and  the  meth- 
ods which  they  pursued  remained  comparatively  primitive. 
Active  prospecting  was  then  undertaken  by  the  Government 
and  large  ore  deposits  were  revealed.     New  mines  with 
modem  machinery  were  opened  up  and  the  3,600  tons  pro- 
duction at  that  time  has  now  increased  threefold.    The 
ore  taken  from  the  shallow  pits  of  the  alluvial  deposits  is 
washed  from  the  hillsides  by  a  series  of  sluices.     These  are 
supported  by  mazes  of  bamboo,  and  led  to  the  proper  point 
from  a  distant  stream  through  gullies  and  ravines.     The 
action  of  the  water  is  assisted  by  laborers  with  picks.     The 
dressed  ore  is  smelted  at  the  mine  or  in  nearby  villages  in 
earthen  blast  furnaces  and  run  off  into  pigs  of  90  pounds. 
Charcoal  is  used  as  a  fuel  and  its  preparation  for  this  pur- 
pose has  denuded  the  forests  surrounding  the  tin  mines. 
The  Government  revenue  is  derived  from  a  royalty  fixed  ac- 
cording to  a  sliding  scale  based  on  market  prices,  and 
amounts  to  about  10  per  cent  of  the  gross  value. 

Oold.--Many  attempts  to  find  gold  in  paying  quantities 
have  been  made  by  foreign  enterprise  in  Siam  but  with  no 
success.  A  few  Chinese  still  wash  gold  in  the  hills  but  no 
large  gold  mining  undertakings  exist. 

Gems.— Sapphires  have  been  found  in  the  Chantaburi  dis- 
trict for  many  years,  the  mines  being  formerly  worked  by 
speculators  who  leased  the  mines  from  the  Government.  In 
1895  the  Government  granted  a  concession  to  a  British 
company  which  took  from  the  speculative  miners  many 
privileges  previously  enjoyed  and  since  that  time  the  profit 
and  interest  in  the  indiviual  mines  has  disappeared,  while 
the  operations  of  the  company  and  its  successors  have  not 
been  particularly  profitable. 

Market  Analysis.— While  87  per  cent  of  Siam's  export 
trade  of  $45,804,168  in  1918  was  with  Singapore  and  Hong- 


|V     J* 


:•   < 


• 


330 


TRADING  WITH  ASIA 


kong,  indicating  the  position  of  Bangkok  as  a  secondary 
market,  the  tendency  toward  direct  imports  has  been  grow- 
ing more  and  more  noticeable.  Of  the  $35,!)18,730  import 
trade  for  1918,  18  per  cent  was  from  the  United  Kingdom 
direct,  18  per  cent  from  Singapore,  and  18  per  cent  from 
Hongkong,  while  16  per  cent  was  from  India,  nine  per 
cent  from  China,  eight  per  cent  from  Japan,  five  per  cent 
from  the  United  States,  five  per  cent  from  Dutch  posses- 
sions, and  the  balance  of  three  per  cent  from  all  other 
countries. 

Cotton  Goods.— Of  the  $9,000,000  cotton  goods  trade  of 
1918  and  1919,  which  constituted  25  per  cent  of  the  total 
imports,  white  shirtings  head  the  list,  with  grey  shirtings  a 
close  second.  Other  items  in  order  of  their  importance  were 
papoons,  sarongs  (a  skirt-like  wrapper),  pakamas,  prints, 
and  cotton  blankets.  A  large  share  of  this  business  is 
with  the  United  Kingdom,  practically  all  of  the  papoons, 
sarongs,  and  prints  originating  there  and  half  of  the  white 
shirting.  Japan  furnished  half  of  the  grey  shirting,  an 
eighth  of  the  white  shirting  and  a  quarter  of  the  cotton 
goods  designated  as  all  others.  The  United  States  share 
in  the  trade  was  negligible. 

Gunny  bags  for  rice  shipment  form  the  second  largest 
item  of  import,  amounting  to  $2,300,000  in  1918.  These 
come  almost  solely  from  India. 

Opium.— Opium  imports  of  $2,000,000  in  1918  also  came 
from  India.  Since  1909  the  Government  has  controlled  the 
sale  of  opium,  which  is  imported  raw,  prepared  by  the  Gov- 
ernment and  sold  in  marked,  sealed  tubes,  through  con- 
tractors, the  wholesale  prices  being  fixed  annually  by  the 
Government.  In  1916  it  was  decided  that  from  that  time 
onward  the  amount  of  opium  to  be  offered  for  sale  should  be 
annually  decreased.  All  opium  smokers  are  to  be  registered 
and  every  precaution  taken  to  prevent  others  from  acquir- 
ing the  habit. 


MARKET  ANALYSIS  OF  SIAM 


331 


Kerosene.— Mineral  oil,  mostly  kerosene,  but  including 
benzine  and  liquid  fuel,  to  the  value  of  $1,500,000,  mainly 
from  the  Dutch  Bast  Indies,  constitutes  the  next  largest 
item  of  import.  The  ratio  by  countries  is  Dutch  East  In- 
dies, 80  per  cent  and  the  United  States,  19  per  cent. 

Gold  leaf  valued  at  $1,260,000  is  imported  for  use  in 
guilding  pagodas  and  the  interiors  of  temples.  All  of  this 
comes  from  Hongkong. 

Silk  Piece  Goods.— Silk  piece  goods  valued  at  $1,000,000, 
90  per  cent  of  which  came  from  Hongkong,  were  imported 
in  1918,  other  suppliers  being  Japan  and  China.     Other 
items  in  order  of  their  importance  were  tobacco  and  manu- 
factures,  $861,655,  half  from  the  United   States  and  a 
quarter  each  from  the  United  Kingdom  and  China;  chemi- 
cals and  medicines,  $654,179,  one-third  from  Japan  and 
one-sixth  each  from  the  United  Kingdom  and  Hongkong; 
white  cotton  yam,  $604,409,  half  from  India ;  and  matches' 
$501,124,  80  per  cent  from  Hongkong.     The  balance  of 
Siam's  imports  constitute  a  long  list  of  articles  such  as 
dyestuffs,  brass  manufactures,  machinery,  matting  and  rat- 
tan goods,  paper  and  paper  goods,  tea,  dried  vegetables, 
colored  yarn,  electrical  goods  and  apparatus,  no  one  of 
which  amounts  to  more  than  $300,000  or  less  than  $100,000 
but  which  depend  for  increased  import  in  the  steadily  ris- 
ing standards  and  purchasing  power  of  the  people. 

Questions 

1.  (a)  What  is  the  importance  of  rice  cultm^  in  the  agricul- 

tural economy  of  Siam? 
(6)  Describe  the  methods  of  growing  and  harvesting  rice. 

2.  (a)  Describe  the  cultivation  of  three  other  crops. 

(b)  How  are  fish  used  and  what  is  their  importance? 

3.  (a)  How  is  teak  forestry  carried  onf 
(6)  Describe  tin  mining  in  Siam. 

4.  What  change  has  been  noted  in  the  destination  of  Siam's  ex- 

ports? 

5.  Mention  three  leading  imports  giving  chief  suppliers  of  each. 


i 


l'( 


BIBLIOGRAPHY  TO  PART  IV 


Malaysia,  French  Indo-china,  and  Siam 


1 


British  Malaysia 

Angieb,  a.  Gorton : 

The  Far  East  Revisited.     London,  1908. 
Abnold,  Wright,  and  Reid,  T.  H.  : 

The  Malay  Peninsula.     New  York,  1912. 
Curtis,  William  Eleroy: 

British  Malaysia.     Chicago  and  New  York,  1905. 
Clifford,  Sir  H.  C. : 

In  Court  and  Kampong.    London,  1903. 
Harrison,  C.  W.  : 

The  Magic  of  Malaya.    London  and  New  York,  1916. 
Rathborne,  a.  B.: 

Camping  and  Tramping  in  Malaya.    London,  1898. 
SwETHENHAM,  Sir  F.  A. : 

British  Malaya.    London,  1907. 
SwETHENHAM,  Sir  F.  A. : 

Real  Malay  Pen  Pictures.    London,  1900. 

IndO'China 

Clifford,  Sir  A.  C. : 

Further  India.    New  York,  1904. 
De  Montpensieb,  Due : 

La  Ville  au  Bois  Dormant.    Paris,  1910. 
Madbelle,  M.  Claudius: 

De  Marseille  dt  Canton.    Paris,  1902. 
Vincent,  Frank  : 

Land  of  the  White  Elephant.    New  York,  1874. 

Siam 
Campbell,  J. : 

Siam  in  the  Twentieth  Century.    London,  1902. 
Cabteb,  a.  Cecil: 

The  Kingdom  of  Siam.    New  York  and  London,  lf04. 


BIBLIOGRAPHY 


333 


Graham,  A.  W. : 

Siam — A  Handbook  of  Practical,  Commercial  and  Political 
Information.    London,  1913. 

LoTi  Pierre : 

Siam,  translated  from  the  French  by  W.  P.  Baines.    1898. 

Smyth,  H.W.: 

Five  Tears  in  Siam.    London,  1898. 

Thompson,  P.  A. : 

giam — An  Account  of  the  Country  and  People.    Boston  and 
Tokyo,  1910. 
Whitney,  Caspar: 

Jungle  Trails  and  Jungle  People,    New  York,  1905. 
Young,  Ernest: 

Kingdom  of  the  Yellow  Robe.    New  York,  1900. 


1,1, 


i 


'•I     (r' 


ui 


CHAPTER  XXV 

COMMERCIAL  POSSIBILITIES  IN  THE  PAR  EAST 

In  presenting  the  history,  laws,  and  commerce  of  the  Far 
Eastern  peoples  an  attempt  has  been  made  to  rob  of  its 
mystery  a  subject  of  vital  importance  to  the  business  men 
of  the  United  States.  Much  has  been  said  in  recent  months 
about  Far  Eastern  trade  but  it  has  been  approached  as 
though  it  were  a  new  subject  and  in  many  respects  the 
discussions  resemble  those  which  took  place  in  England 
in  1814  when  India's  great  possibilities  were  beginning  to 
dawn  on  party  leaders. 

Strictly  speaking  the  possibilities  for  commercial  activ- 
ity in  the  Far  East  by  the  American  people  were  limited 
before  the  war  to  three  countries — China,  Siberia,  and  the 
Philippines.  In  all  other  territories  artificial  handicaps 
are  given  the  manufacturers  of  the  mother  country  and  the 
field  is  open  to  American  goods  only  when  they  are  not  of  a 
competitive  nature.  Since  the  armistice  the  industrial 
paralysis  in  Europe  has  greatly  increased  the  numbers  of 
articles  demanded  by  the  Far  East  which  cannot  be  manu- 
factured in  the  respective  home  countries  of  the  different 
colonies.  As  a  result  the  United  States  has  been  called 
upon  to  furnish  increasingly  larger  supplies  of  iron  and 
steel,  machinery,  hardware,  chemicals,  dyes,  and  a  number 
of  other  commodities.  This  sudden  demand  from  the 
Orient  has  opened  the  eyes  of  our  traders  to  a  tremendous 
market  whose  real  proportions  were  never  before  realized. 
The  business  that  has  literally  fallen  into  their  laps  forced 
many  of  them  to  open  up  selling  organizations  in  Far 

334 


COMMERCIAL  POSSIBILITIES  IN  THE  FAR  EAST     335. 

Eastern  countries  and  this  in  turn  has  broken  enough 
traditions  in  some  of  the  long  established  firms  to  make 
their  sally  into  the  Oriental  field  permanent. 

This  need  for  permanence,  this  building  for  future 
profits,  and  a  realization  that  a  proper  foundation  means 
much  in  practical  returns,  is  the  one  lesson  that  is  hardest 
for  many  of  our  business  men  to  learn.  Firms  who  have 
** nursed*'  a  domestic  customer  for  years  until  they  have 
built  up  a  growing  business  for  him  and  themselves  will 
often  violate  every  rule  of  good  business  practice  when 
they  enter  the  foreign  field.  To  ''switch"  agents  in  the 
Orient,  where  stability  has  attained  the  significance  of  a 
cult,  is  tantamount  to  commercial  suicide,  yet  it  is  difficult 
to  convince  many  business  men  of  the  error  of  such  a 
course.  In  a  country  where  the  past  is  living  and  the 
future  never  comes,  the  precedents  of  yesterday  and  not  the 
possibilities  of  tomorrow  are  the  ruling  passion.  In  such  a 
country  and  with  such  a  people  decisions  made  slowly  but 
with  a  view  to  permanency  are  ultimately  the  most  profit- 
able. 

But  curiously  enough  the  spirit  of  the  new  and  strange 
is  all  pervading  and  human  pyschology  is  pretty  much 
the  same  everywhere.  The  West,  in  its  mad  progress,  has 
been  forced  to  invent  new  machines  and  new  articles  of  a 
utilitarian  value  which  the  East  in  its  slower  advance  has 
found  attractive.  The  fact  that  these  symbols  of  a  new 
order  precede  rather  than  succeed  the  coming  of  the  new 
order  in  the  East  is  of  little  practical  consequence.  The 
spirit  which  accepts  them  is  the  same  as  that  in  the  West 
and  they  are  accepted  first  for  their  novelty  and  later 
for  their  utility.  In  no  other  way  may  the  acceptance  of 
Western  invention  by  the  East  be  accounted  for,  espe- 
cially by  those  peoples  who  as  a  rule  have  steadily  re- 
fused to  accept  any  other  symbol  of  Western  civilization, 
either  moral  or  material. 


1*1 


4 


336 


TRADING  WITH  ASIA 


This  widespread  use  of  the  symbols  of  Western  civiliza- 
tion in  the  Far  East  is  having  a  slow  but  certain  effect. 
The  Oriental  who  has  ridden  in  an  automobile  can  never 
be  the  same  Oriental  again.  This  experience  has  awak- 
ened first  a  lively  interest  in  what  Western  civilization 
really  means  and  finally  a  respect  for  what  this  civilization 
has  accomplished.  If  this  respect,  once  instilled,  is  fol- 
lowed by  a  proper  presentation  of  what  Western,  and  par- 
ticularly American,  business  ideals  mean,  the  net  result 
must  inevitably  be  a  general  strengthening  of  good  under- 
standing between  the  East  and  West.  Unfortunately,  how- 
ever, such  a  result  has  not  always  been  attained. 

The  most  successful  accomplishments  have  been  achieved 
in  China  and  American  business  methods  and  American 
business  morals  have  had  a  more  pronounced  effect  there 
than  in  any  other  country  in  the  Orient.  There  are  many 
other  reasons  for  this  feeling,  however,  besides  the  one 
suggested;  the  pyschological  similarity  between  the  con- 
tinental peoples  of  China  and  the  United  States;  the  po- 
sition as  protector  of  a  disintegrating  Empire  which  was 
early  assumed  by  the  United  States  in  promulgating  the 
Hay  Doctrine;  the  return  of  the  Boxer  Indemnity;  and 
the  fact  that  China  and  the  United  States  are  trade  cog- 
nates, each  furnishing  and  demanding  commodities  not  pro- 
duced by  the  other;  all  of  these  and  other  reasons  of  a 
political  character  have  brought  the  two  people  closer  to- 
gether during  the  past  decade. 

In  Japan,  unfortunately,  most  of  these  basic  considera- 
tions which  tend  toward  closer  relations  are  lacking.  The 
insularity  of  the  Japanese  has  the  same  reaction  upon 
Americans  as  the  insularity  of  the  British  has  upon  the 
French.  Some  American  author  might  have  written  VIsle 
Inconnue  aJbout  Japan,  and  the  same  whimsical  allusions, 
evincing  a  total  lack  of  mutual  appreciation,  would  hold 
true.    In  the  case  of  America  and  Japan,  however,  the 


COMMERCIAL  POSSIBILITIES  IN  THE  FAR  EAST     337 

absence  of  geographical  propinquity  makes  an  otherwise 
humorous  situation  somewhat  tragic.  The  net  result  has 
been  a  widening,  rather  than  a  narrowing,  of  the  ocean  of 
illusion  which  separates  the  two  people.  The  two  slender 
threads  of  traditional  friendship,  and  a  rather  over-worked 
gratitude  for  Perry  *s  daring  diplomacy,  are  only  reinforced 
by  the  same  supplementary  trade  relations  that  exist  with 
China.  To  say  that  American  steel  and  cotton  and  Jap- 
anese silk  bind  America  to  Japan  with  ties  of  unbreakable 
friendship  is  to  place  too  much  dependence  upon  mere  ma- 
terial ties,  which  recent  experience  has  proven  are  not  en- 
tirely immune  from  the  effects  of  strain.  Besides,  these 
economic  ties,  unless  reinforced  by  mutual  moral  under- 
standing, tend  to  force  themselves  apart  and  we  can  see  this 
development  under  way  now  in  the  efforts  of  Japan  to  be- 
come economically  independent  of  American  steel  and  cot- 
ton and  of  America  to  protect  the  silk  industry  of  China 
and  other  Far  Eastern  countries  from  gradual  decay. 
America's  best  interests  require  a  seeking  out  of  a  more 
lasting  basis  for  friendship  and  understanding  with  Japan 
than  exists  to-day. 

It  is  difficult  to  approach  the  problems  underlying 
American  trade  expansion  in  the  European  colonies  of  the 
Far  Eastern  tropics  with  anything  like  an  engaging  frank- 
ness. Our  idea  of  what  a  tropical  colony  should  be,  as 
typified  by  the  Philippines,  may  not  be  acceptable  to  the 
rulers  of  other  Oriental  tropical  peoples.  However,  the 
very  example  of  our  work  in  the  Philippines  cannot  be 
without  its  effects.  The  whole  question  of  whether  we 
should  not  make  the  Philippines  the  entrepot  for  Ameri- 
can business,  as  well  as  the  Oriental  base  for  American 
ideals  in  all  fields  of  endeavor,  is  one  which  should  re- 
ceive the  recognition  which  its  importance  deserves.  The 
impulse  which  our  generous  treatment  of  the  Filipinos  in 
matters  of  self-government  has  aroused  in  the  natives  of 


f  <, 


338 


TRADING  WITH  ASIA 


COMMERCIAL  POSSIBILITIES  IN  THE  FAR  EAST      339 


]i  1 


rn 


other  colonies  should  not  be  permitted  to  die,  because  in 
that  impulse  rests  all  that  is  hopeful  in  a  future  Oriental 
civilization  which  should  bring  some  distinct  contribution 
to  the  world. 

The  duty  of  the  Western  trader  is,  therefore,  a  very  im- 
portant one.  Through  the  medium  of  commerce,  which 
after  all  is  the  one  great  clearing  house  of  human  under- 
standing, he  is  permitted  to  make  that  impression  upon  the 
mind  of  the  East  which  sometimes  has  been  denied  in  full 
to  both  his  religious  and  scholarly  predecessors.  **By  their 
deeds  ye  shall  know  them'*  would  seem  to  be  the  one  cri- 
terion by  which  a  full  fledged  acceptance  or  rejection  of 
Western  civilization  by  the  East  is  to  be  accomplished.  It 
is  incumbent  upon  us,  therefore,  to  realize  the  double  mis- 
sion which  American  foreign  traders  are  performing  in  the 
East.  Every  sale  is  either  a  strengthening  or  a  loosening 
of  the  bonds  of  human  friendship  between  peoples  long 
remote  in  their  mutual  understanding  and  sympathies.  As 
one  historian  remarked  of  the  hasty  and  ill  advised  British 
reforms  in  India,  which  brought  on  the  Sepoy  revolt,  **  there 
is  a  common  sympathy  in  the  human  heart,  which  should 
have  guided  the  British  administration.'*  When  laws 
which  relieved  the  people  of  cruel  and  unjust  practices  were 
passed  they  received  the  popular  support  of  all  castes,  but 
those  which  dealt  with  the  academic  questions  of  adminis- 
tration incited  nothing  more  than  apathetic  indifference. 
This  common  understanding  is  no  more  surprising  or  grati- 
fying than  when  discovered  in  a  people  whose  whole  tra- 
dition and  civilization  is  so  diametrically  opposite  to  our 
own.  Yet  it  is  the  one  safe  chord  which  successful  inter- 
course both  in  business  and  in  politics  can  strike. 

A  formula  is  at  hand  then  for  overcoming  the  artificial 
handicaps  which  may  be  raised  against  American  trade  in 
the  Orient.  The  language  of  the  ** square  deal"  is  the 
Esperanto  of  commercial  success.    The  possibilities  of  the 


field  are  great  but  they  must  always  be  subordinated  to 
American  ideals  and  the  high  purpose  of  the  American 
tradition.  If  we  stand  for  anything  in  commerce  or  poli- 
tics, we  stand  for  freedom,  and  we  cannot  afford  to  deviate 
from  this  ideal  in  our  Far  Eastern  commercial  policy. 
Every  American  salesman  in  the  Orient  either  stands  for 
this  ideal  or  falls  by  it,  and  the  measure  of  his  Americanism 
is  the  measure  of  his  purpose  to  represent  the  generous  im- 
pulses of  a  free  people. 


: )!' 


ill 


;i 


:■  I 


APPENDICES 


APPENDIX  I 


THE  FAE  EASTERN  SILVER  SITUATION  * 


!l 


■  \ 

•'  V. 


:  mm 


(i 


li: 


In  1893  the  free  coinage  of  silver  in  India  was  discontinued 
and  in  1898  an  exchange  rate  of  15  rupees  per  pound  sterling 
(or  1  shilling  4  pence  per  rupee)  was  adopted,  making  the  par 
32.44  cents  per  rupee.  A  gold  standard  reserve  was  established 
to  be  used  for  the  purpose  of  purchasing  exchange  at  the  fixed 
rate  whenever  the  market  price  should  show  a  tendency  to  rise 
above  that  rate.  This  fixed  rate  of  exchange  has  remained  in 
effect  until  the  recent  rise  in  the  price  of  silver.  In  1914  a  com- 
mission reported  favorably  on  the  continuance  of  this  scheme, 
recommending  that  it  consist  largely  of  gold  in  London  and  that 
it  be  used  exclusively  for  maintaining  the  fixed  rate  of  exchange 
and  not  loaned  for  other  purposes. 

Xethodi  Used  in  Indian  Exchange — The  transfer  of  funds 
from  India  to  London  for  the  use  of  the  Secretary  of  State  for 
India  is  carried  on  as  follows: 

Tenders  are  invited  weekly  for  bills  of  exchange  and  tele- 
graphic transfers  on  the  Indian  Government  authorities  at  Cal- 
cutta, Madras,  and  Bombay.  A  limit  is  designated  which  the 
aggregate  amount  will  not  exceed,  but  the  authorities  do  not  bind 
themselves  to  allot  the  whole  amount  mentioned  and,  as  a  matter 
of  policy,  prior  to  1914  they  would  not  accept  any  applications  at 
prices  lower  than  1  shilling  3  and  2%2  pence  per  rupee  for  bills. 
The  price  charged  for  telegraphic  transfers  was  ordinarily  H2 
pence  per  rupee  higher  than  that  charged  for  bills.  The  rate  at 
which  these  drafts  were  sold  to  the  public  varied  in  normal  times 
from  the  fixed  rate  of  1  shilling  4  pence,  within  the  narrow  limits 
of  the  cost  of  shipping  gold  from  India  to  England.  Owing  to 
England's  normally  large  excess  of  exports  over  imports,  this 
system  of  drafts  offered  a  convenient  and  profitable  way  to  settle 
balances  due  from  England  to  India  and  was  adopted,  therefore, 
as  the  machinery  through  which  the  Government  regulated  the 

lAn  article  by  F  R.  Eldridge,  Jr.,  reprinted  from  Commeroe 
Reports,  1920. 

343 


11 


a 


344 


TRADING  WITH  ASIA 


rate  of  exchange.  The  customary  procedure  in  recent  years  be- 
fore the  war  was  to  sell  council  drafts  free  as  long  as  there  was  a 
demand  which  could  be  met  from  the  resources  of  the  Government 
in  India. 

Effect  of  War  on  Silver  Exchange — The  immediate  effect  of 
the  war  was  a  falling  off  in  both  imports  and  exports,  due  to  the 
shortage  of  cargo  space.  Germany  had  always  been  a  large 
importer  of  Indian  cotton,  jute,  rice,  and  coconut  products,  and 
the  war  had  a  depressing  effect  upon  these  industries.  In  a  very 
short  time,  however,  the  great  demand  for  Indian  products  by  the 
Allies  and  by  the  Orient,  to  whom  the  belligerent  nations  were  no 
longer  able  to  supply  goods,  resulted  in  increased  activity 
throughout  India.  Japan  was  in  the  market  for  all  the  cottofi' 
she  could  buy  and  there  was  a  corresponding  demand  for  jute, 
tea,  hides  and  skins,  raw  wool,  and  indigo.  This  increase  is 
reflected  in  the  trade  of  the  United  States  with  India  during  a 
period  of  from  1912-1919. 

Trade  of  the  United  States  with  India 


June  30 

Imports 

Exports 

Excess  of 
Imports  over  Exporti 

1912 

50,948,901 

15y628,059 

35,320,842 

1913 

67,949,259 

11,040,039 

56,909,220 

1914 

73,6.30,680 

10,854,591 

65,776,209 

1915 

51,982,703 

11,696,094 

40.286,609 

1916 

71,745,626 

19,297,016 

62.448,610 

1917 

102,106,632 

28,396,043 

73,710,639 

1918 

105,277,743 

42,395,622 

62.682,121 

1919 

125,471,468 

60,501,740 

74,969,728 

The  gold  standard  reserve  which  had  gone  to  India  as  a  result 
of  Government  support  of  the  exchange  rate  in  1914,  was  trans- 
ferred back  to  London  in  1915.  Indian  industries  were  pros- 
perous, prices  high,  and  securities  were  being  bought  back  from 
Indian  creditors  and  large  investments  made  in  Britiih  war  loans 
and  other  securities.  The  ratio  between  the  London  price  of 
silver  per  ounce  and  the  gold  value  of  silver  in  the  rupee  is 
shown  in  the  table  on  the  following  page. 

This  great  increase  in  the  price  of  silver  has  already  been  ex- 
plained and,  coupled  with  the  increased  trade  balance  in  favor  of 
India  and  the  prohibition  of  the  export  of  gold  from  England,  the 


FAR  EASTERN  SILVER  SITUATION        345 

rate  of  .exchange  for  cou»cil  drafts  underwent  the  following 

changes : 

Normal.— 1  shilling  4  pence  per  rupee. 
September  1,  1917.— 1  shilling  5  pence  per  rupee. 
April  11,  1918- — 1  shilling  6  pence  per  rupee. 
August  12,  1919. — 1  shilling  10  pence  per  rupee. 
September  10,  1919. — 2  shillings  per  rupee. 

At  the  same  time  the  Indian  Government  regulations  provided 
that  all  silver  imports  were  to  be  turned  over  to  the  Government 
and  enacted  drastic  legislation  against  the  breaking  up  or  melting 
of  rupees.  During  1919  council  drafts  were  sold  in  New  York 
through  the  New  York  branch  of  the  Bank  of  Montreal  and  have 

SiLVEB  Value  Ratio  Tabue 


Date 

London 

Price  of  Silver  per  1 

Gold  Value  of 

Ounce,   1,000 

Fine 

Silver  in  Rupee 

1910 

$.58462 

$.20096 

1911 

.58300 

.20041 

1912 

.66454 

.22644 

1913 

.65360 

.22468 

1914 

.59797 

.20555 

1915 

.56099 

.19204 

1916 

.74213 

.25511 

1917 

.94627 

.32520 

1918 

1.12602 

.38707 

met  with  great  success.  The  scarcity  of  silver  in  India  menaced 
the  convertibility  of  the  Indian  currency  and  would  have  entailed 
most  serious  consequences  had  not  the  Pittman  Act  of  1918  author- 
ized the  Secretary  of  the  Treasury  to  melt-  American  silver  dollars 
to  the  maximum  of  $350,000,000.  Under  this  Act  200,000,000 
ounces  of  silver  were  sold  to  the  British  Government  at  $1.00  per 
ounce  plus  transportation,  melting,  and  recoinage  costs.  In  one 
year,  from  May  1,  1918,  to  May,  1919,  $248,580,000  worth  of 
silver  was  shipped  on  British  Government  account. 

The  Chinese  Situation 

The  question  has  arisen  as  to  how  this  Government  may  encour- 
age commercial  interests  to  take  advantage  of  the  adverse  exchange 
situation  in  China  to  export  our  commodities  to  that  market.  It 
would  probably  be  of  interest  first  to  point  out  that  the  excess  of 


346 


TRADING  WITH  ASIA 


commodity  imports  from  China  has  not  had  nearly  as  much  effect 
upon  the  Chinese  exchange  market  as  has  the  rise  in  the  price  of 
silver  as  a  commodity  and  the  correspondingly  low  exchange 
value  in  gold  which  Chinese  exporters  receive  for  their  commodi- 
ties. Had  China  been  on  a  gold  basis  the  opportunity  for 
exporting  our  commodities  to  China  in  order  to  balance  exchange 
would  have  been  easily  encouraged,  but  China  is  so  immediately 
dependent  upon  her  exports  for  the  funds  with  which  to  purchase 
goods  from  abroad  that,  although  the  high  price  of  silver  is  tech- 
nically favorable  to  the  import  of  commodities,  practically  it  is 
so  unfavorable  to  the  necessai-y  prerequisite  of  exporting  Chinese 
products  as  to  have  seriously  interrupted  these  exports  and  con- 
sequently impaired  the  purchasing  of  foreign  imports. 

Silver  Production  of  the  World  i 


Average 

Average 

Silver  Pro- 

Ounces 

Dollars 

Price 

Value  Haik 

duction  of 

per 

wan  Tael 

Mexico 

Ounce 

U.  S.  Odd 

Ounces 

1910 

221,708,000 

119,723,000 

$  .54077 

$  .66 

71,372,000 

1911 

225,338,000 

121,682,000 

.53928 

.65 

79,032,000 

1912 

224,311,000 

137,884,000 

.61470 

.u 

74,640,000 

1913 

225,908,000 

135,246,000 

.60458 

.T» 

70,640,000 

1914 

211,105,000 

116,719,000 

.55512 

.er 

70,704,000 

1915 

178,851,000 

92,809,000 

.51892 

.62 

39,570,000 

1916 

156,627,000 

107,519,000 

.68647 

.7© 

22,838,000 

1917 

163,995,000 

146,814,000 

.99525 

1.08 

31,214,000 

1918    179,900,000= 

179,900,000^ 

1.00000 

1.19 

61,000,000 

1  Estimates  of  the  Director  of  the  Mint,  as  given  in  the  Federal  Re- 
serve Bulletin  for  February  1,  1919,  page  141. 

2  Preliminary  estimate  of  the  Federal  Reserve  Board. 

Causes  of  High  Silver  in  China — The  rise  in  the  price  of  silver 
has  been  due  primarily  to  an  inordinate  demand  from  India, 
whose  domestic  production  of  commodities  has  been  enormously 
increased  during  the  war  by  Government  measures  as  a  war 
necessity  in  order  to  obviate  excessive  shipments  of  raw  materials 
to  England  for  manufacture  and  re-export  to  India.  As  a  result 
India  is  now  industrially  self-sufiBcient  in  many  lines,  and  as  the 
production  of  raw  materials  has  at  the  same  time  been  rapidly 
increasing,  the  enormous  trade  balance  in  her  favor  has  had  to  be 


FAR  EASTERN  SILVER  SITUATION        347 


*  I 
I  I 


met  by  increasingly  large  shipments  of  silver.  This  demand  for 
silver  as  a  medium  of  exchange,  coupled  with  a  world  shortage  of 
silver  as  a  commodity,  due  primarily  to  the  conditions  in  late 
years  in  the  Mexican  mining  districts,  the  diversion  of  labor  in 
other  mining  districts  to  war  industries,  the  increased  use  of 
silver  money  by  soldiers  in  the  field,  and  the  general  rise  in  all 
commodities  in  terms  of  gold,  has  brought  about  the  present  high 
price  of  silver,  with  the  resulting  effects  upon  our  Far  Eastern 
trade  which  are  noted  above. 

Silver  Demand  Independent  of  Commodity  Exchange. — ^With 
the  bulk  of  the  world's  supply  of  bullion,  both  gold  and  silver, 
in  this  country,  we  have  naturally  been  called  upon  during  recent 
months  to  supply  considerably  more  bullion  to  the  Far  East  than 

China's  Trade  Balance  with  the  United  States 


Excess  of 

June  30 

Imports 

Exports 

Imports  over  Exports 

1912 

29,573,732 

24,361,199 

5,212,533 

1913 

39,010,000 

21,326,834 

17,683,966 

1914 

39,302,780 

24,698,734 

14,604,244 

1915 

40,156,139 

16,402,475 

23,753,664 

1916 

71,655,045 

25,131,459 

46,523,536 

1917 

105,905,531 

37,195,608 

68,709,925 

1918 

116,644,981 

43,476,623 

73,169,358 

1919 

105,762,859 

82,992,495 

22,770,364 

the  excess  of  commodity  imports  has  warranted.  With  this 
demand  for  silver  bullion  largely  independent  of  any  exchange 
of  commodities,  but  due  in  a  very  great  degree  to  the  rise  in  the 
value  of  silver  itself  as  a  commodity,  the  Far  Eastern  exchange 
situation  is  greatly  complicated,  and  as  long  as  silver  retains  this 
high  commodity  value,  its  value  as  a  medium  of  exchange  will 
remain  correspondingly  high.  The  adverse  rate  of  exchange  be- 
tween Chinese  silver  currency  and  American  gold  will  continue, 
therefore,  to  be  determined  more  by  this  factor  than  by  the  move- 
ment of  commodities,  and  conversely,  the  attempt  to  rectify 
the  exchange  rate  by  shipments  of  commodities  would  have 
little  effect.  In  this  connection  the  cumulative  effect  of  China's 
excess  of  exports  to  this  country  since  1912  is  of  considerable 
interest. 

There  is  one  way  in  which  the  situation  may  be  taken  imme- 
diate advantage  of,  however,  and  that  is  by  supplying  the  Chinese 
markets  in  the  interior  with  needed  manufactured  goods,  and 


348 


TRADING  WITH  ASIA 


FAR  EASTERN  SILVER  SITUATION         349 


Fluctuations  in  Silveb  Rates,  1020 


I    4 


TVT          1 

:  Ending 

Value  in  U 

.  S.  Gold 

Week 

Calcutta 

Shanghai 

Rupee  Par  .3244 

Tael  Par  1.20 

January 

3 

.4475 

1.64 

10 

.4430 

1.66 

17 

.4330 

1.60 

24 

.4265 

1.66 

31 

.4125 

1.675 

February 

7 

.4475 

1.60 

14 

.47 

1.68 

21 

.46 

1.68 

28 

.455 

1.68 

March 

6 

.465 

1.68 

13 

.455 

1.36 

20 

.445 

1.45 

27 

.46 

1.46 

April 

3 

.46 

1.45 

10 

.465 

1.39 

17 

.465 

1.28 

24 

.46 

1.36 

May 

1 

.4475 

1.31 

8 

.4425 

1.24 

15 

.405 

1.15 

22 

.4175 

1.18 

29 

.415 

1.19 

June 

5 

.415 

1.14 

12 

.405 

1.04 

19 

.39 

.96 

26 

.39 

1.03 

July 

3 

.375 

1.03 

10 

.38 

1.03 

i 

Par  .S9  1 

ParlJ436^ 

17 

.365 

1.02 

24 

.3625 

1.03 

31 

i                  .37 

1.06 

August 

7 

.355 

1.06 

14 

.35. 

1.07 

21 

.3375 

1.13 

28 

.34 

1.13 

September 

4 

.335 

1.09 

11 

.3275 

1.06 

1  On  basis  of  1/10  average  value  of  £  sterling  quarter  ending  June 
30,  1920. 

2  On  basis  average  value  of  silver,  quarter  ending  June  30,  1920. 


effecting  a  practical  barter  of  these  goods  for  Chinese  raw  mate- 
rials. This  may  be  accomplished  by  large  organizations  such  as 
the  Standard  Oil  Company,  or  the  British  American  Tobacco 
Company,  but  for  those  firms  who  wish  to  sell  only  or  to  buy  only 
in  the  large  ports  the  present  difficulties  seem  insuperable.  It 
would  be  well  for  such  firms  to  seriously  contemplate  broader 
organizations  through  which  "wash"  sales  may  be  effected,  thus 
eliminating  as  far  as  possible  the  entrance  of  silver  into  their 

transactions. 

Present  Situation  More  Hopeful — Aside  from  various  fluctua- 
tions a  glance  at  the  gold  values  of  Indian  rupees  and  Shanghai 
taels  for  the  34  weeks  from  January  3rd  to  September  4th,  1920, 
shows  a  constant  downward  trend. 

Effect  of  the  American  Peg — The  heavy  Chinese  buying  of 
silver  to  restock  a  denuded  market,  when  the  embargo  was  lifted 
in  May,  1919,  which  was  followed  by  the  heavy  exports  from 
China  during  the  same  year,  tended  to  bull  the  silver  market. 
Satiation  resulted,  and  the  decline  in  silver  set  in  because  exports 
from  Far  Eastern  countries  dwindled.  The  break  in  the  market 
which  occurred  in  June,  1919,  was  not  expected  to  be  as  severe  as 
it  was,  because  of  a  misunderstanding  of  the  provisions  of  the 
Pittman  Act,  making  it  applicable  to  American  produced  silver 
only.  The  net  result  has  been  to  establish  two  silver  rates:  the 
New  York  rate  which  is  held  near  $1.00  per  ounce  by  repurchases 
of  American  mined  silver  at  that  price  to  replace  the  $260,000,000 
melted  down  and  shipped  to  India  in  1918;  and  the  London  rate 
which,  though  affected  by  the  New  York  peg,  is  somewhat  lower, 
being  94>^  cents  per  ounce  on  September  15th,  1920.  The  effect 
has  been  stimulating  to  American  silver  production.  A  new  mine 
operating  in  California  has  increased  the  production  in  that  state 
for  the  first  half  of  1920  to  503,794  ounces,  as  compared  with 
376,310  ounces  for  the  same  period  in  1919.  The  Texas  mines,  if 
operated  at  the  same  rate  of  production  for  the  whole  year  as  for 
the  first  half,  will  produce  500,000  ounces.  In  1920  Idaho  produc- 
tion will  considerably  surpass  the  1919  figures,  while  the  Utah 
mines  are  making  large  shipments,  although  their  smelters  were 
affected  recently  by  labor  troubles.  In  Arizona,  Montana  and 
Oregon  the  production  will  decrease  varying  from  60  per  cent  of 
normal  in  Montana  and  81  per  cent  in  Oregon.  This  increased 
production,  on  the  whole,  however,  will  not  affect  the  world's 
market  unless  the  London  price  of  silver  exceeds  $1.00  per  ounce. 
Mexican  production,  however,   has  increased  in  1920  over  the 


350 


TRADING  WITH  ASIA 


record  figures  of  1919,  as  evidenced  by  the  $68,881,053  wortK 
imported  into  the  United  States  in  the  year  ending  June  30,  1920, 
as  compared  with  $56,218,587  imported  during  the  previous  year, 
while  Peru  contributes  an  increase  of  $4,000,000  over  the 
$7,574,526  imports  from  that  country  in  1919.  It  is  estimated 
that  Mexico's  1920  production  will  reach  75,000,000  ounces,  or 
12,500,000  ounces  more  than  1919,  because  hundreds  of  abandoned 
mines  are  being  worked.  In  all,  our  silver  imports  for  the  year 
designated  were  $102,899,506,  as  compared  with  $78,825,266  in 
1919.  Our  exports  of  silver,  on  the  other  hand,  have  declined 
almost  50  per  cent  from  the  $301,174,550  exported  in  the  year 
ending  June  30, 1919,  $214,481,099  of  which  went  to  India,  to  only 
$179,037,260  exported  in  the  same  fiscal  year  1920.  China  took 
$117,570,415  of  these  total  United  States  sUver  exports  in  1920. 

With  India's  proverbial  appetite  for  silver  somewhat  diverted 
by  the  fixing  of  the  rupee  at  the  higher  exchange  rate,  with  the 
United  Sates  silver  market  kept  steady  by  artificial  means,  result- 
ing in  increased  production,  and  with  conditions  tending  to 
increased  silver  production  all  over  the  world,  especially  in  Mexico 
and  Peru,  on  the  one  hand,  and  on  the  other  hand  a  tendency  to 
lower  commodity  values,  necessitating  a  lesser  use  of  the  circu- 
lating medium  in  all  countries,  and  slackened  use  of  silver  coin 
by  soldiers  in  the  field,  a  period  of  normal  prices  in  the  silver 
market,  approximating  production  costs,  may  be  looked  forward 
to  with  considerably  more  assurance  than  at  any  time  during  the 
past  six  years. 

As  can  be  clearly  perceived,  the  net  result  of  the  high  price  of 
silver  in  China  has  been  stagnating  to  foreign  trade  with  that 
country.  The  actual  need  of  our  commodities  is  great,  and  our 
need  for  Chinese  raw  materials  is  equally  urgent,  but  the  American 
merchant  cannot  offer  enough  gold,  in  terms  of  silver,  to  induce 
the  Chinese  merchant  to  part  with  his  goods,  and  as  long  as  the 
Chinese  merchant  holds  his  materials,  the  world  shortage  continues 
and  the  prices  rise.  The  paper  profit  is  of  no  benefit  to  the 
Chinese  producer  of  these  materials  who  is  unable  to  exchange 
his  surplus  raw  materials  for  foreign  manufactures.  The  result 
has  been  a  tremendous  stimulus  to  Chinese  domestic  manufactures 
which  has  been  greatly  encouraged  by  the  boycott  of  Japanese 
imports.  It  will  be  interesting  to  note  the  effect  this  development 
has  upon  the  future  foreign  trade  of  China,  but  it  is  felt  that  it 
will  be  many  years  before  the  Chinese  will  become  an  economically 
self -sufficient  people,  and  until  this  is  brought  about  the  oppor- 


FAR  EASTERN  SILVER  SITUATION         351 

tunity  for  large-scale  commodity  exchange  transactions  in  the 
interior  will  remain.  The  good  will  which  the  Chinese  people 
feel  toward  America  is  a  factor  of  inestimable  importance  in  such 
development. 


■T      < 


APPENDIX  II 

THE  INCJOBPORATION   OF  AMERICAN   COMPANIES   IN   CHINA 

For  some  time  there  has  been  more  or  less  of  a  lively  interest  in 
Chinese  trade  with  this  country.  Congress  has  been  liberal  in 
providing  funds  for  the  promotion  of  commerce  with  China  and 
the  Far  East.  The  Shipping  Board  is  ready  to  allocate  tonnage 
wherever  the  volume  of  trade  warrants.  The  Navy  Department 
has  recently  been  authorized  to  relieve  the  cable  situation  by  ac- 
cepting commercial  messages  for  transmission  by  naval  radio  to 
the  Far  East  and  elsewhere.  The  American  consuls  in  China  are 
working  indefatigably  in  the  interest  of  American  trade.  The 
Bureau  of  Foreign  and  Domestic  Commerce  has  special  trade 
commissioners  in  China  to  push  the  sale  of  our  goods  and  learn 
new  ways  of  facilitating  commercial  transactions,  and  a  whole 
army  of  salesmen  and  representatives  of  American  firms  are  flood- 
ing the  hotels  in  Chinese  ports  taking  initial  orders  and  looking 
over  the  ground.  But  there  are  certain  weak  links  in  this  chain 
of  endeavor,  which  if  not  strengthened  may  cause  the  whole  effort 
to  be  of  little  avail.  America  must  have  strong  selling  organiza- 
tions in  China  permanently. 

Permanency  Essential  for  SnccesB — ^Permanency  usually  means 
profits  and  Great  Britain  realized  this  when  the  British  Com- 
panies Act  was  framed  to  permit  British  companies  to  incorporate 
abroad,  and  operate  free  of  all  income  or  excess  profits  tax  by  the 
home  government.  The  British  Government  very  wisely  believed 
that  the  indirect  benefits  to  the  country  from  increased  overseas 
trade  created  by  those  foreign  established  British  companies  would 
more  than  offset  any  direct  income  to  the  Government  in  the  form 
of  taxation,  tending  to  discourage  these  foreign-trade  operations. 
Moreover,  as  soon  as  the  company's  profits  created  in  this  for- 
eign trade  are  distributed  to  the  individual  stockholders  at  home, 
or  to  those  abroad  and  subsequently  remitted  to  England,  they  are 
taxed  just  the  same  as  any  home  earned  individual  income.  More- 
over, severe  fluctuations  in  silver  in  China  require  larger  reserves 
to  assure  safe  trading,  and  these  cannot  be  encouraged  if  they  are 
taxed.    The  tendency,  therefore,  is  to  encourage  just  what  Eng- 

852 


INCORPORATION  IN  CHINA 


353 


land  wishes  to  encourage,  the  re-investment  abroad  of  the  profits 
of  British  companies,  profits  earned  in  foreign  ventures. 

The  Hongkong  Companies — This  law  is  administered  in  China, 
where  due  to  extraterritorial  rights,  British  companies  operate 
under  British  law,  through  ordinances  of  the  Crown  Colony  of 
Hongkong.  The  only  tax  on  Hongkong  Copipanies,  as  they  are 
called,  is,  therefore,  only  a  nominal  stock  fee  payable  when  the 
articles  of  incorporation  are  filed.  Companies  operating  under 
such  a  law  are  naturally  at  a  great  advantage  over  companies  not 
so  favored,  so  that  many  large  undertakings  in  China,  financed 
by  Americans,  Germans,  Japanese,  and  nationals  of  other  coun- 
tries have  incorporated  under  the  Hongkong  Ordinances  and  are 
to  all  intents  and  purposes  British  companies.  During  the  war, 
however,  certain  Orders  in  Council  'were  issued  by  the  British 
Government,  requiring  that  a  majority  of  the  board  of  directors 
of  such  companies  should  be  British  subjects,  and  they  were  fol- 
lowed by  subsequent  orders  which  went  into  effect  March  15, 
1920,  requiring  in  addition 'that  the  managing  directors  of  these 
companies  should  be  British  subjects.  These  orders,  while  aimed 
at  the  Germans  endeavors  to  "comeback"  in  the  China  trade,  hit 
a  number  of  corporations  which  were  majority  American  owned. 
These  corporations  were  faced  with  the  alternatives  of  either  con- 
tinuing under  entire  British  control  or  withdrawing  from  Hong- 
kong incorporation  and  incorporating  under  some  other  law. 

The  Methods  of  Incorporation — A  survey  of  the  situation  re- 
vealed the  fact  that  there  were  only  a  limited  number  of  courses 
to  pursue.  They  could  incorporate  under  the  laws  of  some  state 
in  the  United  States  in  which  case  they  would  be  subject  to  heavy 
state  and  Federal  income  tax;  they  could  dissolve  as  corporations 
and  register  as  partnerships  at  the  American  Consulate,  in  which 
event  they  would  be  subject  to  Federal  income  tax  on  the  partner- 
ship profits;  or  they  could,  under  a  ruling  of  the  judge  of  the 
American  Court  at  Shanghai,  register  as  corporations  under  the 
territorial  laws  of  Alaska,  but  unless  these  laws  were  amended 
they  would  still  be  subject  to  Federal  income  tax.  Few  of  them 
adopted  the  first  method,  and  only  those  companies  in  which  the 
individual  stockholders  were  very  few,  could  adopt  the  second, 
but  a  number  have  accepted  the  rather  doubtful  status  of  the  third 
method  in  the  hope  that  Congress  would  adopt  the  necessary 
amendment.  The  great  majority,  however,  have  appointed  Brit- 
ish managing  directors  and  continued  as  full  fledged  British  com- 
panies. 


354 


TRADING  WITH  ASIA 


INCORPORATION  IN  CHINA 


355 


r  •' 


American  Incorporation  Needed — For  years  the  Bureau  of 
Foreign  and  Domestic  Commerce  has  pointed  out  to  American 
manufacturers  who  desire  to  extend  their  business  to  China  two 
things:  First,  they  should  choose  as  far  as  possible  American 
agents  for  their  lines  in  China.  The  reason  is  as  old  as  our  for- 
eign trade  experience.  Foreign  agents  usually  have  interest  in 
building  up  a  line  only  so  long  as  they  cannot  obtain  a  substitute 
line  in  their  own  countries,  but  as  soon  as  they  do,  the  American 
line  is  dropped,  or  worse  still,  held  inert  in  order  to  cripple  pos- 
sible competition.  Second,  as  soon  as  the  business  warrants, 
branches  should  be  established  in  China  by  the  manufacturer  and 
operations  directed  from  there  rather  than  from  tlie  United  States. 
In  both  instances  the  manufacturer  who  attempts  to  follow  this 
policy  is  checkmated  by  the  present  situation.  The  establishment 
of  American  import  and  export  houses  in  China  under  American 
management  is  impossible  because  the  profit  on  many  staples  is 
too  low  to  permit  competition  with  non-taxed  British  houses,  and 
in  many  lines  the  income  tax  would  represent  all  the  difference 
between  encouragement  and  discouragement  for  such  ventures. 
Moreover,  such  companies  where  organized  for  operation  in  China 
usually  invite  local  Chinese  capital  as  a  matter  of  policy  in  facili- 
tating the  marketing  of  goods,  and  if  they  are  taxed  they  cannot 
compete  with  the  British  non-taxed  companies  in  attractiveness 
of  their  stock  offerings.  The  establishment  of  branch  houses  of 
manufacturers  is  discouraged  in  the  same  way. 

Cooperative     Selling    Requires    American    Incorporation ^But 

the  way  in  which  the  present  conditions  work  against  American 
export  trade  to  China  are  more  far  reaching  still.  For  years  the 
favorite  method  of  selling  machinery  has  been  on  the  coopera- 
tive plan,  whereby  the  Chinese  capitalists  who  desire  to  set  up  an 
ice  plant,  for  example,  form  a  company  with  fifty-one  per  cent 
German  capital  furnished  by  the  German  ice  plant  manufacturer 
who  thereby  pays  himself  for  his  machinery  and  the  remaining 
stock  is  subscribed  by  Chinese  who  furnish  the  working  capital. 
The  German  machinery  company^s  stock  is  gradually  taken  up 
out  of  the  profits  of  the  undertaking  and  the  whole  plant  soon 
remains  the  sole  property  of  the  Chinese  stockholders.  Such  a 
plan  cannot  work  under  forms  of  incorporation  now  available  to 
Americans  and  a  very  facile  method  of  placing  large  consignments 
of  American  machinery,  therefore,  is  relegated  to  the  scrap  heap. 

The  Dyer  Bill — There  is  one  method  of  meeting  this  situation 
constructively  and  without  makeshift  and  the  Bureau  of  Foreign 


and  Domestic  Commerce  was  instrumental  in  drafting  a  law  for 
the  "Incorporation  of  certain  Companies  Operating  in  China" 
which  has  been  before  Congress  for  several  years.  In  its  latest 
form  (the  Dyer  Bill,  H.  R.  16043,  66th  Congress,  3rd  session)  it 
was  passed  by  the  House  on  February  21, 1921  and  referred  to  the 
Senate  Committee  on  Judiciary.  The  bill  provides  among  other 
things  that  the  majority  stock  in  companies  created  under  it 
shall  be  held  by  American  citizens  and  that  companies  so  incor- 
porated for  carrying  on  business  in  China  alone,  shall  not  be 
subject  to  any  other  or  higher  taxation  by  this  Government  than 
corporations  organized  under  the  laws  of  other  nations  for  the 
purpose  of  operating  in  China  are  taxed,  as  ascertained  by  the 
Secretary'  of  the  Treasury.  This  is  all  that  is  required  to  place 
American  business  on  an  equality  with  other  business  in  China, 
but  until  we  have  this  opportunity  of  equal  expansion,  our  efforts 
to  promote  trade  on  any  large  scale  in  China  are  greatly  handi- 
capped. 
The  text  of  the  Dyer  Bill,  as  amended,  is  as  follows: 

A  Bill  to  authorize  the  incorporation  of  companies  to  promote 
trade  in  China. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  this 
Act  may  be  cited  as  the  "China  Trade  Act,  1921." 

Sec.  2.  When  used  in  this  Act,  unless  the  context  otherwise  in- 
dicates,— 

The  term  "person"  includes  individual,  partnership,  corporation, 
and  association; 

The  term  "China"  means  (1)  China  including  Manchuria,  Tibet, 
Mongolia,  and  any  territory  leased  by  China  to  any  foreign  govern* 
ment  (2)  the  Crown  Colony  of  Hongkong  and  (3)  the  Province 
of  Macao ; 

The  term  "Secretary"  means  the  Secretary  of  Commerce ; 

The  term  "corporation"  means  a  coi^oration  chartered  under 
the  provisions  of  this  Act ; 

The  term  "federal  district  court"  means  any  federal  district 
court,  the  United  States  Court  for  China,  and  the  Supreme  Court 
of  the  District  of  Columbia; 

The  term  "this  Act"  includes  all  lawful  regulations  issued  there- 
under by  the  Secretary. 

Sec.  3.  The  Secretary  shall  exercise  all  power  and  perform 
all  duties  conferred  on  him  by  this  Act  only  through  such  officers 
or  agents  in  China  as  he  shall  by  regulation  designate  and  authorize 


356 


TRADING  WITH  ASIA 


80  to  aet,  and  for  this  purpose  the  Secretary  may  utilize  such  exit- 
ing or  create  such  new  offices  or  agencies,  as  he  deems  necessary. 
"For  the  purposes  of  this  Act,  the  action  of  any  officer  or  agent  80 
designated  and  authorized  shall  be  made  in  the  name  and  held  to  be 
the  act  of  the  Secretary :  Provided,  That  upon  appeal  to  the  Sec- 
retary any  such  action  may  be  affirmed,  modified,  or  aet  aside  by  the 
Secretary,  as  he  deems  advisable. 

Sec.  4.  (a)  Three  or  more  individuals  (hereinafter  in  this  Act 
referred  to  as  the  "incorporators"),  a  majority  of  whom  are  citi- 
zens of  the  United  States,  may,  in  accordance  with  the  provisions 
of  this  Act,  form  a  corporation. 

(&)  Such  corporation  may  engage  in  any  business  or  enterprise 
conducted  wholly  within  China  and  carried  on  with  persons  in 
China ;  except  that  the  corporation — 

(1)  Shall  not  engage  in  any  business  or  enterprise  unlawful 
in  the  territory  in  which  it  is  carried  on;  and 

(2)  Shall  not  engage  in  the  business  of  discounting  bills,  notes, 
or  other  evidences  of  debt,  of  receiving  deposits,  of  buying  and 
selling  bills  of  exchange,  or  of  issuing  bills,  notes,  or  other 
evidences  of  debt,  for  circulation  as  money;  nof  engage  in  any 
form  of  banking  business. 

(c)  The  corporation  shall  not  engage  in  any  business  or  enter- 
prise other  than  that  authorized  by  subdivision  (b),  except  that 

it—  .       ^ 

(1)  May  purchase  in  the  United  States  for  transportation  to 
China,  goods,  wares,  or  merchandise  necessary  to  the  establishment 
and  conduct  of  a  business  or  enterprise  in  which  it  is  authorized  to 

engage; 

(2)  May  do  in  the  United  States  and  elsewhere  any  act  which 
is  incidental  to  the  organization  of  the  corporation  or  to  the  issue, 
sale,  transfer,  or  redemption  of  its  stocks,  bonds,  or  other  evi- 
dences of  indebtedness;  and 

(3)  May  do  in  the  United  States  and  elsewhere  any  act  which 
is  approved  by  the  Secretary  and  necessary  to  the  establishment 
and  conduct  of  any  business  or  enterprise  in  which  it  is  authorized 

to  engage. 

Sec.  5.  The  incorporators  shall  make  application  for  a  charter 
and  file  it  with  the  Secretary  in  such  manner  and  in  such  form  as 
the  Secretary  shall  by  regulation  prescribe.     The  application  shall 

state — 

(a)  The  name  of  the  proposed  corporation,  which  ihall  end 

with  the  legend,  "Federal  Inc.  U.  S.  A.' 


fy. 


INCOEPORATION  IN  CHINA 


357 


(6)  The  location  of  its  principal  office,  which  shall  be  in  China; 

(c)  The  purpose  for  which  it  is  formed  and  the  character  of  the 
business  in  which  it  is  to  engage; 

(d)  The  amount  of  capital  stock,  the  designation  of  each  class 
of  stock  and  the  terms  upon  which  it  is  to  be  issued,  and  the  num- 
ber and  par  value  of  the  shares  of  each  class  of  stock; 

(e)  The  duration  of  the  corporation,  which  may  be  permanent 
or  for  a  limited  time; 

(/)  The  names,  addresses,  and  desijmations  of  directors  and 
officers,  who  shall  be  citizens  of  the  United  States,  and  who  are 
hereby  authorized  to  manage  the  affairs  of  the  corporation  until 
their  successors  are  elected  by  the  stockholders  in  accordance  with 
the  by-laws  of  the  corporation ; 

(g)  The  fact  that  an  amount  equal  to  25  per  centum  of  the 
amount  of  capital  stock  has  been  in  good  faith  subscribed  and 
actually  paid  in  cash,  personal  property,  tangible  or  intangible, 
or  real  property,  and  is  in  the  custody  of  the  individuals  specified 
in  subdivision  (/) ;  and  the  name  and  address  of  each  such  sub- 
scriber. If  any  part  of  such  payment  is  made  in  property  other 
than  cash,  no  charter  shall  be  issued  unless  the  Secretary  finds 
that  the  property  is  described  and  its  value  stated  in  the  same 
manner  as  provided  in  section  9,  and  that  such  value  is  the  fair 
market  value,  and  is  at  least  equal  to  the  difference  between  25  per 
centum  of  the  capital  eibock  and  the  amount  of  cash,  if  any,  so 
paid  in;  and 

(h)  The  time  and  place  of  the  first  stockholders*  meeting, 
which  shall  be  noi>  later  than  one  year  after  the  issuance  of  the 
charter. 

Sec.  6.  No  corporation  shall  have  or  use  a  corporate  name 
which,  in  the  opinion  of  the  Secretary,  is  likely  to  mislead  the 
public.  No  corporation  shall  maintain  any  office,  including  its 
principal,  and  home  and  branch  offices,  if  any,  at  any  place  other 
than  in  China. 

Sec.  7.  The  application  for  a  charter  shall  be  filed  with  the 
Secretary.  If  the  Secretary  finds  that  the  application  and  state- 
ments therein  conform  to  the  requirements  of,  and  that  the  incor- 
poration is  authorized  by,  this  Act,  he  shall,  upon  the  payment  of 
such  fee  as  he  shall  by  regulation  prescribe,  issue  a  charter 
authorizing  the  incorporators  to  act  as  a  body  corporate.  The 
application  shall  thereupon  constitute  the  articles  of  incorpora- 
tion, and  a  copy  of  such  articles  shall  be  made  a  part  of  the  charter 
and  printed  in  full  thereon.    The  Secretary  shall,  upon  the  pay- 


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INCORPORATION  IN  CHINA 


359 


ment  of  such  fee  as  he  shall  by  reflation  prescribe,  issue  as 
many  certified  copies  of  the  articles  of  incorporation  or  of  the 
charter,  as  amended,  as  may  be  desired  by  any  interested  party. 
The  corporation  shall  keep  a  copy  of  the  charter,  as  amended,  at 
the  principal  office  specified  in  its  articles  of  incorporation.  Any 
failure,  previous  to  the  issuance  of  the  charter,  by  the  incorpora- 
tors, or  in  respect  to  the  application  for  the  charter,  to  conform 
to  any  requirement  of  law  which  is  a  condition  precedent  to  such 
issuance,  may  not  subsequent  thei'eto  be  held  to  invalidate  the 
charter  err  alter  the"  legal  status  of  any  act  of  the  corporation  there- 
under, except  in  proceedings  instituted  by  the  Secretary  to  revoke 
the  charter. 

Sec.  8.  (a)  The  corporation  shall  be  a  citizen  of  the  United 
States  invested  with  the  powers  and  subject  to  the  conditions  and 
restrictions  of  this  Act.  A  majority  of  the  votin?  shares  issued 
by  the  corporation  shall  at  all  times  be  owned  by  citizens  of  the 
United  State's. 

(6)  The  corporation — 

(1)  Shall  have  the  right  of  succession; 

(2)  May  use  a  corpoMte  seal  and  alter  it  at  pleasure; 

(3)  May  sue  and  be  sued; 

(4)  May  make   contracts  and   incur  liabilitiea; 

(5)  May  acquire  and  hold  personal  property,  tangible  and 
intangible,  and  real  estate,  necessary  to  effect  tiie  purposes  for 
which  it  is  formed,  and  dispose  of  the  same  when  no  longer  needed 
for  such  purposes ;  and 

(6)  May  borrow  money  and  imae  its  notes,  coupoti  or  registered 
bonds,  or  other  evidences  of  debt  therefor,  and  secure  their  pay- 
ment by  a  mortgage  of  its  property. 

Sec.  9.  All  shares  of  stock  shall,  when  issued,  be  paid  for  in 
cash,  personal  property,  tangible  or  intangible,  or  real  property, 
at  not  leSB  than  their  par  value,  and  when  so  issued  shall  be  held 
to  be  full-paid  and  nonassessable;  but  no  stock  shall  be  issued 
for  personal  property,  tangible  or  intangible,  or  real  property, 
unless  (a)  a  description  of  the  property  for  which  the  stock  is 
to  be  issued  and  a  statement  of  the  value  at  which  the  property  is 
to  be  received  has  been  filed  with  the  Secretary  in  such  a  manner 
and  upon  the  payment  of  such  fee  as  he  shall  by  regulation  pre- 
scribe, and  (6)  the  Secretary  finds  and  has  certified  to  the  cor- 
poration that  such  value  is  not  more  than  the  fair  market  value 
of  the  property  and  is  at  least  equal  to  the  par  value  of  the  stock 
issued  therefor. 


Sec.  10.  (a)  The  by-laws  may  provide— 

(1)  The  time,  place,  manner  of  calling,  giving  notice,  and  eon- 
duct  of,  and  determination  of  a  quorum  for,  the  meetings,  annual 
or  special,  of  the  stockholders  or  directors; 

(2)  The  number,  qualifications,  designations,  and  manner  of 
choosing  and  fixing  the  tenure  of  office  and  compensation,  of  all 
directors,  officers,  and  employees :  Provided,  That  the  number  of 
directors  shall  be  not  less  than  5,  and  the  president,  treasurer, 
and  secretary,  or  corresponding  officers,  and  a  majority  of  the 
directors,  shall  be  citizens  of  the  United  States  resident  in  China ; 

(3)  The  designation  of  each  class  of  stock  and  the  terms  upon 
which  it  is  issued,  the  number  and  par  value  of  the  shares  of  each 
class  of  stock,  the  manner  of  calling  for  and  collecting  payments 
upon  stock  subscribed  for,  the  penalties  and  forfeitures  for  non- 
payment, the  preparation  of  certificates  of  stock,  and  the  manner 
of  recording  the  sale  or  transfer  of  stock  and  its  representation 
at  stockholders*  meeting. 

(6)  The  by-laws  of  the  corporation  may  be  amended  by  the 
stockholders  at  a  stockholders'  meeting.  No  by-law  or  amendment 
thereto  shall  be  in  effect  until  (1)  the  corporation  files  a  copy 
thereof  in  such  manner  and  form  and  pays  such  fees  in  respect 
thereto  as  the  Secretary  shall  by  regulation  prescribe,  and  (2) 
such  by-law  or  amendment  is  found  and  certified  by  the  Secretary 
to  conform  to  the  requirements  of  this  Act. 

Sec.  11.  The  following  questions  shall  be  determined  only  by 
the  stockholders  at  a  stockholders'  meeting:  (a)  amendments  to 
the  articles  of  incorporation  or  by-laws;  (b)  authorization  of  the 
sale  of  the  entire  business  of  the  corporation  or  of  an  independent 
branch  of  such  business;  (c)  authorizaftion  of  the  voluntary  dis- 
solution of  the  corporation.  The  adoption  of  any  such  amendment 
or  authorization  shall  require  a  vote  cast  by  at  least  a  majority  of 
the  voting  shares  and  the  approval  of  at  least  three-fourths  of  such 
votes  cast.  No  such  amendment  or  authorization  shall  take  effect 
until  (1)  the  corporation  files  a  statement  of  the  action  in  such 
manner  and  form  and  pays  such  fees  in  respect  thereto  as  the 
Secretary  shall  by  regulation  prescribe,  and  (2)  such  amendment 
or  authorization  is  found  and  certified  by  the  Secretary  to  conform 
to  the  requirements  of  this  Act. 

Sec.  12.  For  the  purposes  of  this  Act  the  fiscal  year  of  the 
corporation  shall  correspond  with  the  calendar  year  ending  Dec- 
ember 31.  The  corporation  shall  make  and  file  with  the  Secretary, 
in  such  manner  and  form  and  at  such  time,  as  the  Secretary  shall 


360 


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INCORPORATION  IN  CHINA 


361 


by  regulation  prescribe,  a  report  of  its  business  for  each  such 
fiscal  year  .and  of  its  financial  condition  at  the  close  of  the  year. 
The  corporation  shall  furnish  a  true  copy  of  the  report  to  each 
of  its  stockholders. 

Sec.  13.  Every  dividend  declared  by  the  corporation  shall  be 
derived  wholly  from  the  surplus  profits  of  its  business,  to  be 
determined  in  such  manner  as  the  Secretary  shall  by  regulation 
prescribe. 

Sec.  14.  It  is  hereby  declared  to  be  the  purposes  of  this  Act  (1) 
to  promote  trade  and  conmierce  with  China  and  create  and  develop 
markets  in  China  for  articles  of  commerce  exporttid  from  the 
United  States;  (2)  to  provide  a  means  whereby  citizens  of  the 
United  States  may  form  corporations  therefor;  (3)  so  to  regulate 
such  corporations  as  to  keep  them  at  all  times  in  control  of  individ- 
uals who  are  citizens  of  the  United  States,  and  (4)  to  provide 
for  the  proper  conduct  of  such  corporations.  The  Secretary  of 
Commerce  is  authorized  to  prescribe  and  promulgate  such  regula- 
tions and  issue  such  orders,  not  in  eonfiict  with  the  provisions  of 
this  Act,  as  he  deems  necessary  to  carry  into  effect  the  provisions 
and  purposes  of  the  Act,  including  the  manner  and  form  in  which 
the  corporation  shall  keep  its  records  and  accounts,  and  the 
amounts  of  any  fees  authorized  to  be  prescribed  by  the  Secretary. 
All  fees  paid  to  the  Secretary  shall  be  covered  into  the  Treasury 
of  the  United  States  as  miscellaneous  receipts. 

Sec.  15.  The  Secretary  may  examine  the  business  and  affairs 
of  the  corporation  whenever  he  has  reason  to  believe  that  such 
business  and  affairs  are  being  conducted  in  a  manner  (1)  contrary 
to  the  provisions  of  this  Act  or  any  other  law  or  treaty  of  the 
United  States,  or  of  the  articles  of  incorporation  or  by-laws  of 
the  corporation,  or  (2)  detrimental  to  the  business  interests  and 
good  will  of  the  United  States.  The  coat  of  the  examination  shall 
be  paid  by  the  corporation  upon  the  demand  of  the  Secretary.  If 
the  corporation  fails  to  pay  such  costs  upon  such  demand,  the 
Secretary  may  collect  the  amount  of  the  costs  in  a  civil  suit 
against  the  corporation  brought  in  the  name  of  the  United  States. 

Sec.  16.  The  Secretary  may  suspend  the  charter  of  a  corpora- 
tion whenever,  with  or  without  examination  as  provided  in  sec- 
tion 15,  he  becomes  satisfied  that  the  business  and  affairs  of  the 
corporation  are  conducted  or  have  been  conducted  within  the  year 
last  preceding  in  a  manner  (1)  contrary  to  the  provisions  of 
this  Act  or  any  other  law  or  treaty  of  the  United  States,  or  of  the 
articles  of  incorporation  or  by-laws  of  the  corporation,  or  (2) 


detrimental  to  the  business  interests  and  good  will  of  the  United 
States.  Such  suspension  shall  not  take  effect  until  10  days  after 
the  Secretary  files  suit  in  the  United  States  Court  for  China  for 
revocation  of  the  charter  of  the  corporation.  Upon  the  petition  of 
the  corporation  to  the  court  at  any  time  within  10  days  after  such 
suit  is  filed  the  court  may  in  its  discretion  stay  the  suspension 
for  such  time  up  to  its  final  decision  in  the  suit  as  it  deems  ad- 
visable. The  court  shall  revoke  the  charter  of  the  corporation 
if  it  finds  that  the  affairs  and  business  of  the  corporation  have 
been  conducted  in  such  a  manner. 

Sec.  17.  In  case  of  the  voluntary  dissolution  of  the  corporation 
or  the  suspension  or  revocation  of  its  charter,  the  directors  of  the 
corporation  shall  be  the  trustees  of  the  creditors  and  stockholders 
of  the  corporation;  except  that  upon  application  to  the  United 
States  Court  for  China  by  any  interested  party,  or  upon  the 
court's  own  motipn  in  any  proceeding  pending  before  it,  the  court 
may  in  its  discretion  appoint  as  the  trustees  such  individuals  other 
than  the  directors,  as  it  may  determine.  In  case  of  the  voluntary 
dissolution  or  revocation  of  the  charter  of  the  corporation,  the 
trustees  are  invested  with  the  powers,  and  shall  do  all  acts, 
necessary  to  wind  up  the  affairs  of  the  corporation  and  divide 
among  the  stockholders  according  to  their  respective  interests 
the  property  of  the  corporation  remaining  after  all  obligations 
against  it  have  been  settled.  In  case  of  the  suspension  of  the 
charter  of  the  corporation,  the  trustees  shall  conduct  the  corporate 
affairs  and  are  invested  with  the  powers  and  subject  to  the 
liabilities  and  duties  provided  in  this  Act  for  the  corporation,  its 
directors,  oflSeers,  and  stockholders.  For  the  purposes  of  this 
section  the  trustees  may  sue  and  be  sued  in  the  name  of  the  cor- 
poration and  shall  be  jointly  and  severally  hable  to  the  stock- 
holders and  creditors  of  the  corporation  to  the  extent  of  the  prop- 
erty coming  into  their  hands  as  trustees. 

Sbo.  18.  For  the  eflScient  administration  of  the  functions  vested 
in  the  Secretary  by  this  Act,  he  may  require,  (a)  by  subpcerfa 
issued  by  him  or  under  his  direction,  the  attendance  of  any  witness 
and  the  production  of  any  book,  paper,  document,  or  other 
evidence  from  any  place  at  any  designated  place  of  hearing  in 
China,  or  if  the  witness  is  actually  resident  or  temporarily  so- 
journing outside  of  China,  at  any  designated  place  of  hearing 
within  fifty  miles  of  the  actual  residence  or  place  of  sojourn  of 
such  witness,  and  (5)  the  taking  of  a  deposition  before  any 
designated  person  having  power  to  administer  oaths.    In  the 


362 


TRADING  WITH  ASIA 


INCORPORATION  IN  CHINA 


363 


.1^ 


I     ■  ^ 

'  f., 


case  of  a  deposition  the  testimony  sball  be  reduced  to  writing  by 
the  person  taking  the  deposition  or  under  his  direction,  and  shall 
then  be  subscribed  to  by  the  deponent.  The  Secretary  may  ad- 
minister oaths  and  examine  any  witness.  Any  T\4tnesses  sum- 
moned before  the  Secretary  and  any  witness  whose  deposition  is 
taken  shall  be  paid  the  same  fees  and  mileage  as  are  paid  witnesses 
in  the  courts  of  the  United  States. 

(b)  In  the  case  of  failure  to  comply  with  any  subpoena  or  in  the 
case  of  the  contumacy  of  any  witness  appearing  before  the  Sec- 
retary, he  may  invoke  the  aid  of  any  federal  district  court. 
Such  court  may  thereupon  order  the  witness  to  comply  with  the 
requirements  of  such  subpoena,  and  to  give  evidence  touching 
the  matter  in  question.  Any  failure  to  obey  such  order  may  be 
punished  by  such  court  as  a  contempt  thereof. 

(c)  No  person  shall  be  excused  from  so  attending  and  testifying 
or  deposing,  nor  from  so  producing  any  book,  paper,  document, 
or  other  evidence  on  the  ground  that  the  testimony  or  evidence, 
documentary  or  otherwise,  required  of  him  may  tend  to  incrimi- 
nate him  or  subject  him  to  a  penalty  or  forfeiture ;  but  no  natural 
person  shall  be  prosecuted  or  subject  to  any  penalty  or  forfeiture 
for  or  on  account  of  any  transaction,  matter,  or  thing,  as  to  which 
in  obedience  to  a  subpoena  and  under  oath,  he  may  so  testify  or 
produce  in  evidence,  documentary  or  otherwise.  But  no  person 
shall  be  exempt  from  prosecution  and  punishment  for  perjury 
committed  in  so  testifying. 

(d)  For  the  efficient  administration  of  the  functions  vested  in 
the  Secretary  by  this  Act,  he,  or  any  officer,  employee,  or  agent 
thereof,  duly  authorized  in  writing  by  the  Secretary,  shall  at  all 
reasonable  times  for  the  purpose  of  examination  have  access  to  and 
the  right  to  copy  any  book,  account,  record,  paper,  or  corres- 
pondence relating  to  the  business  or  affairs  of  a  corporation. 
Any  person  who  upon  demand  refuses  any  duly  authorized  officer, 
employee,  or  agent  such  right  of  access  or  copying,  or  hinders,  ob- 
structs, or  resists  him  in  the  exercise  of  such  right,  shall  be  liable 
to  a  penalty  of  $500  for  each  such  offense.  Each  day  during 
any  part  of  which  such  offense  continues  shall  constitute  a  sep- 
arate offense.  Such  penalty  shall  be  recoverable  in  a  civil  suit 
brought  in  the  name  of  the  United  States,  and  shall  be  covered  into 
the  Treasury  of  the  United  States  as  miscellaneous  receipts. 

Sec.  19.  The  federal  district  courts  shall  have  exclusive  original 
jurisdiction  of  all  suits  (except  as  provided  by  the  Act  entitled 
"An  Act  creating  a  United  States  Court  for  China  and  prescribing 


the  jurisdicton  thereof,"  approved  June  30,  1906,  as  amended) 
against  a  corporation,  or  a  stockholder,  director,  or  officer  thereof 
in  his  capacity  as  such.  Suit  against  the  corporation  may  be 
brought  in  the  United  States  Court  for  China,  or  in  the  district  in 
which  the  cause  of  action  arose  or  in  which  the  corporation  has  an 
agent  and  is  engaged  in  doing  business.  A  federal  district  court 
having  jurisdiction  of  such  suit  is  authorized  to  direct  service  of 
process  by  registered  mail  upon  the  corporation.  Any  judgment, 
order  or  decree  rendered  by  the  court  in  any  such  suit  shall,  upon 
the  presentation  of  a  certified  copy  thereof  to  any  other  federal 
district  court,  be  enforced  by  such  other  court,  as  the  judgment, 
order,  or  decree  may  require. 

Sec.  20.  No  (a)  individual,  partnership,  or  association,  (6)  cor- 
poration not  incorporated  under  this  Act  or  under  a  law  of  the 
United  States,  or  (c)  corporation  of  the  District  of  Columbia, 
shall  engage  in  commerce  among  the  several  States  or  with  foreign 
nations  under  a  name  in  connection  with  which  the  legend  "Federal 
Inc.  U.  S.  A."  is  used.  Any  person  violating  this  section  shall 
upon  conviction  thereof  be  fined  not  more  than  $100  for  each 
violation.  Each  day  or  fraction  thereof  during  which  the  viola- 
tion continues  shall  be  deemed  a  separate  offense. 

Sec.  21.  No  stockholder,  director,  officer,  employee,  or  agent,  of 
a  corporation  shall  make,  issue,  or  publish  any  statement,  written 
or  oral,  or  advertisement,  in  any  form,  as  to  the  value  or  as  to 
facts  affecting  the  value  of  stocks,  bonds,  or  other  evidences  of 
debt,  or  as  to  the  financial  condition  or  transactions,  or  facts 
affecting  such  condition  or  transactions,  of  any  corporation  which 
has  issued  or  is  to  issue  stocks,  bonds,  or  other  evidences  of  debt, 
if  he  knows  or  has  reason  to  believe  that  any  material  representa- 
tion in  such  statement  or  advertisement  is  false.  No  stockholder, 
director,  officer,  employee,  or  agent  of  a  corporation  shall,  if  all 
the  authorized  capital  stock  thereof  has  not  been  paid  in,  make, 
issue,  or  publish  any  written  statement  or  advertisement,  in  any 
form,  stating  the  amount  of  the  authorized  capital  stock,  without 
also  stating  as  the  amount  actually  paid  in  a  sum  not  greater  than 
such  amount  paid  in.  Any  person  violating  any  provision  of  this 
section  shall,  upon  conviction  thereof,  be  fined  not  more  than 
$5,000,  or  imprisioned  not  more  than  ten  years,  or  both. 

Sec.  22.  The  following  Acts,  including  administrative  and  penal 
provisions  thereof,  shall  extend  to  the  acts,  failures,  and  omissions 
of  a  corporation  or  the  stockholders,  directors,  officers,  employees, 
and  agents  thereof,  in  their  capacity  as  such,  even  though  such 


364 


TRADING  WITH  ASIA 


INCORPORATION  IN  CHINA 


365 


r): 


W    : 


acts,  failures,  or  omissions  occur  without  the  territorial  jurisdiction 

of  the  United  States:  m    :»    n 

{a)  The  Act  entitled  "An  Act  to  create  a  Federal  Trade  Com- 
mission, to  define  its  powers  and  duties,  and  for  other  purposes," 
approved  September  26, 1914 ; 

(b)  The  National  Prohibition  Act  of  October  28, 1919;  and 

(c)  The  Act  entitled  "An  Act  to  provide  for  the  registration  of, 
with  collectors  of  internal  revenue,  and  to  impose  a  special  tax 
npon  all  persons  who  produce,  import,  manufacture,  compound, 
deal  in,  dispense,  sell,  distribute,  or  give  away  opium  or  coca 
leaves,  their  salts,  derivatives  or  preparations,  and  for  other  pur- 
poses," approved  December  17,  1914,  as  amended. 

Sec.  23.  (a)  Section  231  of  the  Revenues  Act  of  1918  is  amended 
by  striking  out  the  period  at  the  end  thereof,  inserting  in  lieu 
thereof  a  semicolon,  and  adding  a  new  subdivision  to  read  as 

follows:  m     J      A   4. 

"(15)  A  corporation  organized  under  the  China  Trade  Act, 
1921,  but  only  if  and  with  respect  to  any  taxable  year  for  which 
(a)  it  files  a  return  at  the  time  and  place  provided  in  section  241, 
made  in  the  manner,  provided  in  section  239,  and  containing  such 
information  as  the  Commissioner  of  Internal  Revenue,  with  the 
approval  of  the  Secretary  of  the  Treasury,  may  by  regulation 
prescribe;  (b)  it  declares  dividends  during  the  taxable  year  in  an 
amount  equal  to  one-third  of  its  net  income  the  payment  of  which 
not  later  than  60  days  after  the  close  of  such  taxable  year  is 
assured  in  such  manner  as  the  Commissioner  of  Internal  Revenue, 
with  the  approval  of  the  Secretary  of  the  Treasury,  may  require ; 

(c)  it  derives  less  than  5  per  centum  of  its  gross  income  from 
sources  within  the  United  States;  and  {d)  the  Secretary  of  Com- 
merce certifies  to  the  Commissioner  of  Internal  Revenue  that 
during  the  taxable  year  the  corporation  in  all  respects  has  complied 
with  the  provisions  of  the  China  Trade  Act,  1921,  and  regulations 
made  thereunder.  The  Commisssioner  of  Internal  Revenue  with 
the  approval  of  the  Secretary  of  the  Treasury  shall  make  all 
regulations  necessary  for  the  determination  of  such  exemption 
and  of  the  liability  of  shareholders  or  members  to  taxation  in 
respect  to  dividends  paid  by  such  corporation." 

(b)  Section  1  of  the  Revenue  Act  of  1918  is  amended  by  addmg 

at  the  end  thereof  a  new  paragraph  to  read  as  follows: 

"A  corporation  organized  under  the  China  Trade  Act,  1921, 

shall  for  the  purposes  of  this  Act  be  considered  a  domestic  corpora^ 

tion." 


<fi 


{c)  Sections  232,  233,  and  234  of  the  Revenue  Act  of  1918 
are  amended  by  inserting  in  each  of  such  sections  after  the  words 
''corporation  subject  to  the  tax  imposed  by  section  230,"  the 
words  "or  organized  under  the  China  Trade  Act,  1921." 

{d)  Section  240  of  the  Revenu'e  Act  of  1918  is  amended  by 
adding  at  the  end  thereof  a  new  subdivision  to  read  as  follows : 

"(d)  A  corporation  organized  under  the  China  Trade  Act,  1921, 
shall  not  be  deemed  to  be  affiliated  with  any  other  corporation 
within  the  meaning  of  this  section." 

(e)  Section  254  of  the  Revenue  Act  of  1918  is  amended  to 
read  as  follows: 

"Sec.  254.  That  every  corporation  subject  to  the  tax  imposed 
by  this  title,  every  personal  service  corporation,  and  every  corpora- 
tion organized  under  the  China  Trade  Act,  1921,  shall,  when  re- 
quired by  the  Conamissioner,  render  a  correct  return  duly  verified 
onder  oath,  of  its  payments  of  dividends,  stating  the  name  and 
address  of  each  stockholder,  the  number  of  shares  owned  by  him, 
and  the  amount  cf  dividends  paid  to  him." 

Sec.  24.  The  Congress  of  the  United  States  reserves  the  right 
to  alter,  amend,  or  repeal  the  provisions  of  this  Act. 


HONGKONG  ORDINANCES 


367 


APPENDIX  III 

EXTRACT    FROM    HONGKONG    ORDINANCES    RELATING    TO    COMPANIES 
ESTABLISHED    OUTSIDE   THE    COLONY 

Requirements  as  to  companies  established  outnide  the  Colony. 
252.  1.  Every  company  incorporated  outside  the  Colony  which 
shall  establish  a  place  of  business  within  the  Cohmy,  shall  within 
one  month  from  the  establishment  of  the  place  of  business  file 
with  the  Registrar  of  Companies:  (a)  A  certiiied  copy  of  the 
charter,  statutes,  or  memorandum  and  articles  of  the  company,  or 
other  instrument  constituting  or  defining  the  constitution  of  the 
company,  and,  if  the  instrument  is  not  written  in  the  English  lan- 
guage, a  certified  translation  in  the  English  language  thereof;  (6) 
A  list  of  the  directors  of  the  company,  (c)  The  names  and  ad- 
dresses of  some  one  or  more  persons  resident  in  the  Colony  auth- 
orised to  accept  on  behalf  of  the  company  service  of  process  and 
any  notices  required  to  be  served  on  the  company;  and,  in  the 
event  of  any  alteration  being  made  in  any  such  instrument  or  in 
the  directors  or  in  the  names  or  addresses  of  any  such  persons  as 
aforesaid,  the  company  shall  within  the  prescribed  time  file  with 
the  Registrar  a  notice  of  the  alteration.  2.  Any  process  or  notice 
required  to  be  served  on  the  company  shall  be  sufficiently  served  if 
addressed  to  any  person  whose  name  has  been  so  filed  as  afore- 
said and  left  at  or  sent  by  post  to  the  address  which  has  been  so 
filed.  3.  Every  company  to  which  this  section  applies  shall  in 
every  year  file  with  the  Registrar  such  a  statement  in  the  form 
of  a  balance  sheet  as  would,  if  it  were  a  company  formed  and  reg- 
istered under  this  Ordinance  and  having  a  share  capital,  be  re- 
quired under  this  Ordinance  to  be  included  in  the  annual  sum- 
mary. 4.  Every  company  to  which  this  section  a]) plies,  and  which 
uses  the  word  "Limited"  or  the  equivalent  Chinese  characters, 
as  part  of  its  name,  shall:  (a)  In  every  prospectus  inviting  sub- 
scriptions for  its  shares  or  debentures  in  the  Colony  state  the 
country  in  which  the  company  is  incorporated;  and  (h)  Conspic- 
uously exhibit  on  every  place  where  it  carries  on  business  in  the 
Colony  the  name  of  the  companv  and  the  country  in  which  the 

366 


company  is  incorporated;  and  (c)  Have  the  name  of  the  company 
and  of  the  country  in  which  the  company  is  incorporated  men- 
tioned in  legible  characters  in  all  bill-heads  and  letter  paper, 
and  in  all  notices,  advertisements,  and  other  official  publications 
of  the  company.  5.  If  any  company  to  which  this  section  applies 
fails  to  comply  with  any  of  the  requirements  of  this  section  the 
company,  and  every  officer  or  agent  of  the  company,  shall  be  liable 
to  a  fine  not  exceeding  five  hundred  dollars,  or  in  the  case  of  a 
continuing  offence,  fifty  dollars  for  every  day  during  which  the 
failure  continues.  6.  For  the  purposes  of  this  section:  The  ex- 
pression "certified"  means  certified  in  the  prescribed  manner  to 
be  a  true  copy  or  a  correct  translation;  The  expression  "place  of 
business"  includes  a  share  transfer  or  share  registration  office; 
The  expression  "director"  includes  any  person  occupying  the  posi- 
tion of  director,  by  whatever  name  called;  and  The  expression 
"prospectus"  means  any  prospectus,  notice,  circular,  advertise- 
ment, or  other  invitation,  offering  to  the  public  for  subscription 
or  purchase  any  shares  or  debentures  of  the  company.  7.  There 
shall  be  paid  to  the  Registrar  for  registering  any  document  re- 
quired by  this  section  to  be  filed  with  him  a  fee  of  three  dollars  or 
such  smaller  fee  as  may  be  prescribed. 

Imp.  §274. 

Power  of  companies  incorporated  outside  the  Colony  to  hold 
lands.  253.  1.  No  company  incorporated  outside  the  Colony 
may  hereafter  acquire  immoveable  property  unless:  (a)  It  is  em- 
powered by  its  constitution  to  acquire  immovable  property;  and 
(b)  It  shall  have  filed  with  the  Registrar  of  Companies  the  doc- 
uments and  particulars  specified  in  paragraphs  a,  b  and  c  of  sub- 
section 1  of  section  252;  and  (c)  It  shall  have  obtained  the  spe- 
cial consent  of  the  Govemor-in-Council.  2.  Subject  to  the  pro- 
visions of  this  section  any  company  incorporated  outside  the  Col- 
ony shall  have  power  to  acquire,  hold  and  dispose  of  lands  in  the 
Colony  as  if  it  were  a  company  incorporated  under  this  Ordi- 
nance. 

Imp.  fi275. 


CHINESE  TARIFF 


369 


Nam«  af  Artlcl* 


APPENDIX  rV 


the  chinese  tariff  of  1918 
Cotton  and  Cotton  Goods 


Name  of  Article 


Cotton  Piece  Goods,  Orey: 
Grey  Shirtings  and  Sheetings,  not  over 
40-in.  by  41  yards: 

(a)   Weight  7-lb.  and  under 

(h)  Weight  over  7-lb.  and  not  over  9-lb. 
(c)   Weight    over    9-lb.    and    not    over 

11-lb 

Grey  Shirtings  and  Sheetings,  not  over 
40-in.  by  41  yards  and  with  more  than 
110  threads  per  square  inch: 
(a)   Weight  over   11-lb.   and   not   over 

12%-lb 

(h)  Weight  over  12%-lb.  and  not  over 

151^-lb 

(c)   Weight  over  15%-lb 

Grey  Shirtings  and  Sheetings,  not  over 
40-in.    by    41    yards    and    with    110 
threads  or  less  per  square  inch: 
(a)  Weight  over   11-lb.   and   not  over 

15%-lb 

(h)  Weight  over  15%-lb 

Drills  and  Jeans,  Grey,  not  over  31-in.  by 

31  yards  

Drills  and  Jeans,  Grey,  not  over  31-in.  by 
41  yards: 

{a)  Weight  12i^-lb.  and  under 

(6)   Weight  over   12%-lb 

T-Cloths.  Grey,  not  over  34-in.  by  25  yds. : 

(a)   Weight  7-lb.  and  under 

(ft)   Weight  over  7-lb 

T-Cloths,  Grey,  over  34-in.  but  not  over 

37-in.  by  25  yards 

Imitation  Native  Cotton  Cloth  (includ- 
ing Machine-made),  Grey,  not  over 
24-in.  wide  and  with  not  more  than 

110  threads  per  square  inch 

368 


Agreed  Value 

Per 

Btk.  Tla, 

piece 

1.817 
2.681 

(( 

3.530 

piece 

3.933 

it 

4.668 

it 

5.400 

piece 

3.293 
4.000 

u 

2.960 

piece 

3.900 
3.215 

piece 

1.722 
2.312 

t€ 

2.900 

picul 

32.400 

Proposed 
Duty 
Rate 

Hk.Tls. 


0.091 
0.18 

O.IS 


0.20 

0.28 
0.27 


0.16 
0.20 

0.11 


0.20 
0.16 

0.086 
0.12 

0.16 


1.60 


Cotton  Flannel  or  Flannelette  of  Plain 
or  Twill  Weave,  Grey: 

(a)  Not  over  32-in.  by  31  yards 

(6)  Over  32-in.  but  not  over  40-in.  by 

31  yards 

Cotton  Piece  Goods,  White  or  Dyed  {i/rre- 
spective  of  finish)  : 
Plain  White  Shirtings  and  Sheetings,  not 

over  37-in.  by  42  yards 

White  Irishes,  not  over  37-in.  by  42  yards 
Drill  and  Jeans,  White,  not  over  31-in. 

by  32  yards 

Drills  and  Jeans,  White,  not  over  31-in. 

by  42  yards  

T-Cloths,  White,  and  Mexicans,  not  over 

32-in.  by  41  yards 

Dimities,  Piques,  Vestings,  Quiltings, 
and  Bedford  Cords,  White,  not  over 

30-in.  by  30  yards 

Cambrics,   Lawns,   and   Muslins,   White, 

Plain,  not  over  46-in.  by  12  yards  . . . 

Cambrics,   Lawns,   and   Muslins,    White, 

Figured,  not  over  46-in.  by  12  yards  . 

Cambrics,    Lawns,    and    Muslins,    Dyed, 

Plain  or  Figured,  not  over  46-in.  by 

12  yards   

White  or  Dyed  Plain  or  Figured  Muslins, 
Lawns,  Cambrics,  Limbrics,  Pongees, 
Brocades,  and  Striped,  Spotted,  Cord- 
ed, and  Figured  Shirtings: 

(a)   Not  over  30-in.  by  31  yards 

(6)  Over  30-in.  but  not  over  37-in.  by 

42  yards  

Lenos,  White  or  Dyed,  not  over  31-in.  by 

30  yards 

Leno  Brocades,  White  or  Dyed 

Dyed  Shirtings  and  Sheetings,  Plain: 

(c)   Not  over  30-in.  by  33  yards 

(6)   Not  over  30-in.  and  over  33  yards 

but  not  over  43  yards 

(c)  Not  over  36-in.  by  21  yards 

id)  Not  over  36-in.  and  over  21  yards 

but  not  over  33  yards 

(«)   Not  over  36-in.  and  over  33  yards 

but  not  over  43  yards 

Dyed  Drills  and  Jeans,  Plain: 
(a)  Not  over  31-in.  by  33  yards 


Agreed  Value 

Per 

Hk.Tls 

piece 

3.484 

« 

4.800 

piece 

4.183 
5.096 

t* 

3.296 

u 

4.348 

u 

3.614 

M 

4.740 

u 

0.810 

value 

5% 

M 

5% 

piece 

4.443 

tt 

5.000 

value 

2.161 
5% 

piece 

2.7555 

M 

3.5905 
2.1048 

« 

3.30759 

(C 

4.30989 

« 

3.600 

Proposed 
Duty 
Kate 

Hk.Tls. 


0.17 
0.24 

0.21 
0.25 

0.16 

0.22 

0.18 

0.24 
0.041 


0.22 

0.25 

0.11 
•  • « • 

0.14 

0.18 
O.U 

0.17 

0.22 

0.18 


370 


TRADING  WITH  ASIA 


r 


r   V 


Name  of  Articif 


(6)  Not  over  3I-in.  and  over  33  yards 
wt  not  over  43  yards 
Dyed  T-CToths,  Embossed  Caitons,'  Ala- 
pacianos,  Real  and  Imitation  Turkey 

in^^'  ^t.  o?/,^2-^°-  ^y  ^2  yards: 
a     Weight  3^ -lb.  and  under  . . .        . 

^   ^  f.V^u^  ^''^^  ^^-^^-   but  not  over 
o^-lb 

(c)  Weight  over  534.1b. 

Mercerised     Crimps,     White,     Dyed,  "or 

3/rn'l'  ?^'°  7  Figur;d,7ot  ov^r 
32-in.  by  32  yards 

Figured,  not  over  33-in.  by  33  yards  . 
Cotton      Crape       (excluding      Oatmeal 
grapes).      Grey,      Bleached,      Dyed, 
Printed,  or  Dyed  in  the  Yarn: 
ia)   Not  over  15-in.  wide  . 

tIkL^^.^^i-'"-  ^"*  "°*  ^^^'^  Vo-in.  wide 
Lastings.  Italians,  Satteens,  Ribs,  Cords, 

^[1?°''  e^!?*""^  Twills,  Tientsin 
TV  Hs,  Satteen  Drills.  Satteen 
btripes,  Repps,  and  Imitation  (Weft- 
faced)  Venetians,  White  or  Dyed, 
Plain  or  Figured,  not  over  33-in.  by 
33  yards    "^ 

Poplins  and  Venetians,"  White  or  *Dyed; 

Plain,  not  over  33-in.  by  33  yards 
Pophns  and  Venetians,  White  or  Dy;^; 
CoffofpT   '  "*;*  ^'^^I  ^^-^"-  ^y  33  yards.; 

(1)  White,  Dyed,  or  Printed,  or  Dyed 
m  the  Yarn,  exclusive  of  Duplex  or 
Reversible  Prints: 

f  J)  Not  over  25-in.  by  15  yards  . . 
(6)  Over  25-in.  but  not  over  30-in 

by  15  yards 

(c)  Over  25-in.  but  not  over  30-in 

by  31  yards  

id)  Over  30-in.  but  not  over*36-in 

by  15  yards 

(e)  Over  30-in.  but  not  over  36-in. 

by  31  yards 

(2)  Duplex  or  Reversible  Prints  .V 
Dyed  Cotton  Spanish  Stripes;  "I 


Agreed  Value 
^•r    \   Hk.Tls. 

piece  4.676 

piece  1.889 


(I 


u 


piece 


£.400 
3.320 


5.478 
5.265 


5 per cent 
0.106 


value 


Proposed 

Duty 

Rate 

Hk.  Tls. 


0.23 


0.004 

0.12 
0.17 


0.27 
0.26 


0.0053 


CHINESE  TARIFF 


371 


Name  of  Article 


(a)   Not  over  32-in.  by  20  yards 

(6)   Over  32-in.  but  not  over  64-in.  by 

20  yards  

Dyed    Cotton    Velvets    and    Velveteens, 

Plain,  not  over  26-in.  wide 

Cotton  Velvets,  and  Velveteens,  Printed, 
Figured,  or  Embossed,  Velvet  and 
Velveteen  Cords,  Corduroys,  Fustians, 

Moleskins,  and  Plushes  

Canvas,  Cotton  (including  Cotton  Duck), 

for  Sails,  etc 

Stockinet  or  Knitted  Tissue: 

(o)   Raised   

(6)  Not  Raised   

Cotton  Piece  Oooda,  Printed: 

Printed  Cambrics,  Printed  Lawns,  Print- 
ed Muslins,  Printed  Shirtings,  Printed 
Sheetings,  Printed  T-Cloths  (includ- 
ing those  known  as  Blue  and  White 
Printed  T-Cloths),  Printed  Drills, 
Printed  Jeans,  Printed  Diagonal 
Twills,  Twill  Cretonnes,  Printed 
Silesias,  Printed  Repps  (excluding 
Repp  Cretonnes) : 

(o)   Not  over  20-in  wide 

(5)  Over  20-in.  but  not  over  46-in.  by 

12  yards  

(c)  Over  20-in.  but  not  over  32-in.  by 

30  yards  

id)  Over  32-in.  but  not  over  42-in.  by 

30  yards  

Printed  Mercerised  Crimps. 
Printed    Oatmeal    Crapes    and    Oatmeal 
Crape  Cretonnes  not  over  32-in.  by 

30  yards   

Printed  Cotton  Crape. 
Printed  Turkey  Reds,  Real   and  Imita- 
tion, not  over  31 -in.  by  25  yards  . . . . 
Printed  Lenos,  not  over  31 -in.  by  30  yds. 
Printed  Satteens  and  Satinets,  Printed 
Brocades    (including   Printed    Fancy 
Woven  Stripes  or   Checks),   Printed 
Italians,    Printed    Damasks,    Printed 
Venetians,  Printed  Lastings,  Printed 
Beatrice  Twills,  Printed  Cords,  Print- 
ed Poplins,  Printed  Moreens,  not  over 

32-in.  by  30  yards 

Printed  Flannelette. 


Agreec 

I  Value 

Proposed 

Duty 

Rate 

Hk.  Tls. 

Per 

Hk.Tls. 

piece 

2.241 

0.11 

(( 

4.482 

0.22 

yard 

0.2884 

0.014 

value 

5  per  cent 

•  •  •  • 

yard 

0.300 

0.015 

picul 
value 

44.000 
5  per  cent 

2.20 

•  •  •  • 

value 
piece 


(t 


u 


piece 


piece 


I   " 


5  per  cent 
1.CF20 
2.S02 
3.094 

2.705 


2.068 
2.350 


5.000 


.1.051 

0.12 

0.15 

0.14 


0.10 
0.12 


0.25 


372 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


873 


Name  of  Article 


Duplex  or  Reversible  Prints  of  Shirting 
Weave  and  one  colour  only,  not  over 

32-in  by  30  yards  

Printed  Velvets  and  Velveteens. 
Printed  Domestic  Cretonnes,  Printed  Sat- 
teen  Cretonnes,  Printed  Repp  Cre- 
tonnes, Printed  Embossed  Figures, 
Printed  Art  Muslins  and  Casement 
Cloth,  Printed  Cotton  Coatings, 
Trouserings,  and  Gabardines,  and  all 
other    Duplex    or    Reversible    Prints 

except  those  enumerated 

Printed  Blankets. 
Printed  Handkerchiefs. 

The  term  "Printed"  in  this  Tariff  in- 
cludes Pigment  Style,  Direct  Printing 
Style,  Steam  Style,  Discharge  Style,  Mad- 
der or  Dyed  Style,  Resist  Style,  Resist  Par 
Style,  Metal  Style,  and  so  forth,  irrespec 
tive  of  finish. 

The  term  "Duplex  or  Reversible  Print 
in  this  Tariff  includes  all  Printed  Cottont 
having  (a)  a  different  pattern  printed  on 
each  side  of  the  cloth;  (6)  the  same  design 
on  both  sides  of  the  cloth,  whether  printed 
with  one  or  more  rollers. 
Cotton  Piece  Ooods,  Yam-dyed: 
Cotton  Crape. 

Cotton  Flannel,  or  Flannelette. 
Stockinet. 

Not  otherwise  enumerated  

Cotton,  not  otherwise  enumerated 

Cotton,  Raw;  Cotton  Thread,  Cotton  Yam, 
and  Goods  made  of  Cotton: 

Ankle  Bands,  Plain  or  Decorated 

Bags,  New 

Blankets,  Plain,  Printed,  or  Jacquard 
(including  those  with  a  taped  or 
whipped  edge  of  Silk  or  other  mate- 
rial),  and  Blanket  Cloth 

Canvas. 

Crape. 

Counterpanes,  Honeycomb  or  Alhambra: 

(a)  Not  over  2%  yards  long 

(6)   Over  2V2  yards  long 

Embroidered    Edging    or    Insertion,    Ma- 
chine-made     


Agreed  Value 


Per 

Hk.  Tls. 

piece 

3.000 

value 

5  per  cent 

value 


picul 


picul 


value 
value 


5  per cent 


i( 


Proposed 

Duty 

Rate 

Hk.  Tls. 


0.15 


80.000 


40.000 


45.000 
6  per  cent 

6  per  cent 


4.00 


2.00 


2.95 


Agreed  Value 


Flannelette.  „    ».     .j 

Handkerchiefs,  neither  Embroidered  nor 

Initialled:  .  ^  j    tt  j 

(1)  White,  Dyed,  or  Printed,  Hemmed 

(but    not    with    a    drawn-thread 

hem) : 
(o)  Not  over  13-in.  square 

(5)  Over  13-in.  square  but  not  over 
18-in.  square  

(c)  Over  18-in.  square  but  not  over 
30-in.  square 

(2)  White,    Dyed,    or    Printed,    with 
drawn-thread  hem: 

(a)  Not  over  13-in.  square 

(6)  Over  13-in.  square  but  not  over 
18-in.  square  

(c)  Over  18-in.  square  but  not  over 
30-in.  square   

( 3 )  Printed  Handkerchiefs,  Unhenmied : 

(a)   Not  over  18-in.  square 

(6)  Over  18-in.  square  but  not  over 

25-in.  square  

(0)  Over  25-in.  square  but  not  over 
29-in.  square  

id)  Over  29-in.  square  but  not  over 
34-in.  square   

Knitted  Clothing,  Raised  ( including  that 
stitched  with  Silk  Thread  and  with 
facings  of  Silk  or  other  material )  . . 

Raw  Cotton    

Singlets  or  Drawers,  not  Raised  ( includ- 
ing those  stitched  with  Silk  Thread 
and  with  facings  of  Silk  or  other  ma- 
terial )     

Socks  and  Stockings: 
(a)   Not  Raised  on  either  side: 

(1)  Made  of  Ungassed  or  Unmercer- 
ised  Thread   

(2)  Made  of  Gassed  or  Mercerised 
Thread  or  stitched  or  embroid- 
ered with  Silk 

it)   Raised    

(c)   Others   

Stockinet. 
Towels : 

(a)   Turkish     

(h)  Honeycomb  or  Huckaback 


Per 

Hk.Tls. 

1 

dozen 

0.220 

it 

0.360 

t( 

0.530 

if 

0.360 

tt 

0.750 

it 

0.920 

it 

^.190 

it 

(V.640 

it 

0.800 

tt 

1.030 

picul 

74.000 
16.000 

doacn 

2.80D 

picul 

70.000 

tt 

1 .10.000 

value 
value 


picul 


5  per  cent 
5  per  cent 


50.000 
44.000 


Proposed 

Duty 

Rate 

Hk.  Tls. 


0.011 
0.018 
0.027 

0.016. 

0.038 

0.046 

0.01 

0.032 

0.04 

0.052 


3.70 
0.80 


0.14 

3.50 
7.50 


2.50 
2.20 


374 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


375 


'i. 


i 


II 


m 


i  I 


Name  of  Articto 


Thread,  Dyed  or  Undyed  (irrespective  of 
finish) : 

(1)  Sewing  Cotton: 

(a)  In  balls  or  skeins: 

3-cord 

6-cord    

(5)  On  spools  or  cops: 

2-cord,  50  yards  or  less 

3-cord,  50  yards  or  less 

6-cord,  50  yards  or  less 

Other  lengths  in  proportion. 

(2)  Crochet  or  Embroidery  Cotton,  in 
skeins   or  balls 

Waste  Cotton 

Yarn: 

(1)  Grey  (irrespective  of  fold) : 

(a)  Counts  up  to  and  including  17  .  . 

(b)  Counts  above  17  and  up  to  and 
including  23    

(o)  Counts  above  23  and  up  to  and 
including  35 

id)  Counts  above  35  and  up  to  and 
including  45    

(c)  Counts  above  45   

( 2 )  Dyed,  Bleached,  Mercerised,  etc.   . . 


Agreed  Value 


Per 


picul 


gr088 


picul 


picul 

« 

« 
value 


Hk.Tls. 


100.000 
190.000 

0.586 
0.786 
1.458 


82.449 
9.600 


25.500 

27.668 

38.000 

43.600 
5  per  cent 
5  per  cent 


Wool,  Silk,  Linen  and  Hemp  Goods 


FlcLX,  Hemp  and  Jute  Oooda: 

Gunny  Bags,  New 

Gunny  Bags,  Old 

Hemp    

Hemp  or  Hessian  Bags,  New 

Hemp  or  Hessian  Bags,  Old 

Hessian  Cloth 

Canvas  of  Hemp  and  Jute  for  Sails,  etc. 

Canvas  Linen   (elastic),  for  Tailoring  . . 

Tarpaulin  of  Hemp  or  Jute 

Bilk  Goods  and  Silk  Mixtures: 

Silk  Piece  Goods   (all  Silk),  Plain,  Fig- 
ured, or  Brocaded 

Silk  Plushes  and  Silk  Velvets,  Pure 

Silk  Seal,  with  Cotton  back 

Silk  Socks  and  Stockings,   Knitted    (in- 
cluding those  made  of  Artificial  Silk)i 


8.480 

5  per  cent 

14.000 

18.900 

5  per  cent 

18.000 

0.38165 

5  per  cent 

0.229 


5  per  cent 
10.984 
2.9418 

7.000 


Proposed 

Duty 

Rate 
Ilk.  Tls. 


5.00 
9.50 

0.029 
0.039 
0.073 


4.10 
0.48 


1.28 
1.38 
1.90 
2.18 


0.42 

■   •   •  • 

0.70 
0.95 

0.90 
0.019 

0.6  ii 


0.55 
0.15 

0.35 


1  The  French  Delegation  stated  that  it  could  not  agree  to  the  duty 
treatment  proposed  for  these  goods  until  it  had  referred  the  question 
to  its  Government. 


Name  of  Article 


Silk  Mixture  Plushes  and  Velvets  ( i.  e., 
made  of  Silk  mixed  with  other  fibrous 
material,  with  Cotton  back) 

Silk  and  Cotton  Satins,  White  or  Dyed 
in  the  Piece  :i 

(a)  Plain   

( 6 )   Figured   

Silk  and  Cotton  Satins,  Dyed  in  the  Yam.i 

Silk  and  Cotton  Mixtures  not  otherwise 
enumerated    

Silk  Ribbons,  all  Silk  and  Mixtures 

Wool  and  Cotton  Unions: 

Union  Shirtings,  not  over  33-in.  wide  . . . 

Cloth  made  of  remanufactured  Wool  and 
Cotton,  such  as  Meltons,  Vicunas, 
Beavers,  Army  Cloths,  Union  Cloths, 
Leather  Cloths,  Presidents  (including 
Cloth  containing  a  small  quantity  or 
new  Wool  for  facing  purposes),  not 
over  56-in.  wide 

Italian  Cloth,  Plain  or  Figured,  Alpacas, 

Lustres,  Orleans,  and  Sicilians 

Wool  and  Woollen  Goods: 

Wool,   Sheep's    

Blankets  and  Rugs 

Bunting,  not  over  24-in.  by  40  yards  .... 

Camlets,  not  over  31 -in.  by  62  yards  .... 

Flannel,  not  over  33-in.  wide 

Lastings,  Plain,  Figured,  or  Craped,  not 
over  31-in.  by  32  yards 

Llama   Braid    

Long  Ells,  not  over  31-in.  by  25  yards  . . . 

Russian,  Broad,  Superfine,  Medium,  and 
Habit  Cloth,  not  over  76-in.  wide  . . . 

Spanish  Stripes,  not  over  64-in,  wide  . .  . 

All  Woollen  and  Worsted  Yarn  and  Cord, 
including  Berlin  Wool 

Metals 

Aluminum    

Aluminum  Sheets  

Antifriction  Metal    

Antimony  Regulus  and  Refined 

Antimony  Ore   

Brass  and  Yellow  Metal : 

Bars  and  Rods 

1  See  footnote,  page  374 


Agreed  Value 


Per 


catty 


ft 
ft 

value 
value 

yard 


tt 


value 

picul 

pound 

piece 

yard 

piece 
picul 
piece 

yard 
« 


picul 


Hk.  Tls. 


2.6537 


2.533 
3.233 
4.000 

5  per  cent 
5  per  cent 

0.4853 


0.800 
5  per  cent 

17.000 
0.560 
0.560 

15,600 
0.480 

14.620 

150.000 

6.657 

1.520 
0.636 

126.000 


Proposed 
Duty 
Rate 
Hk.  Tls. 


value 
value 
value 
picul 
value 

picul 


0.13 


0.13 
0.16 
0.20 


0.024 


0.04 


0.85 

0.028 

0.33 

0.78 

0.024 

0.73 
7.50 
0.33 

0.076 
0.032 

6.00 


5 percent 

5 per cent 

5 per cent 

14.000 

•  •  •  • 

«   «  •  • 

0.70 

5  per  cent 

«  •  •  • 

30.1H3 

1.50 

M 


376 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


377 


Name  of  Article 


J 


^ 


'1  . 


Bolts,  Nuts,  Rivets,  Washers,  and  Ac- 
cessories     

Ingots    *  * 

Nails    

Old  (fit  only  for  remanufacture) 

Screws   

Sheets  and  Plates 

Tubes   

Wire    

Copper : 

Bars  and  Rods 

Bolts,  Nuts,  Rivets,  and  Washers 

Ingots  and  Slabs 

Nails    

Old  (fit  only  for  remanufacture) 

Sheets  and  Plates 

Tacks   

Tubes    ../.'...... 

Wire     

Wire  Cable .'.*.'.".'.*.*.'.*.*.*.'.' 

Wire  Rope   

Iron  and  Steel,  Ungalvanized   (not  includ- 
ing Bamboo,  Spring,  and  Tool  Steel) : 

Anvils,  Swage-blocks,  Anchors,  and  Parts 
of,  and  Forgings  (each  weighing  in 
every  case  25-lb.  or  over) 

Bolts,  Nuts,  and  Washers 

Castings,  Rough    

Chains,  and  Parts  of 

Cobbles,  Wire  Shorts,  Defective  Wire, 
Bar  Croppings,  and  Bar  Ends.  Galvan- 
ized or  Ungalvanized 

Crossings  for  Railways 

Fish-plates  and  Spikes 

Hoops    

Old  ( fit  only  for  remanufacture ) 

Nail-rod,  Bars,  Twisted  or  Deformed 
Bars,  Tess,  Channels,  Angles,  Joists, 
Girders,  and  other  Structural  Shapes  . 

Nails,  Wire  and  Cut 

Pig  and  Kentledge  

Pipes,  Tubes,  and  Pipe  and  Tube  Fittings 

Plate  Cuttings 

Rails '. 

Rivets    

Screws  

Sheets  and  Plates  %  of  an  inch  thick 
or  more 


Agreed  Value 


Per 


value 
picul 

value 
value 

picul 

(( 


picul 
value 

picul 

« 

value 

picul 

value 

value 

picul 

value 

value 


picul 
value 
picul 


« 


value 
value 
picul 


(€ 

ts 

value 
picul 

tt 

value 

picul 


Hk.Tl8. 


6 per cent 
30.183 
36.765 
6  per  cent 
5  per  cent 
30.183 
47.809 
30.183 

33.95D 
5 per cent 

28.000 

47.385 
5  per  cent 

33.950 
5  per  cent 
5  per  cent 

33.95a 
5  per  cent 
5  per  cent 


11.484 

5  per  cent 

5.132 

7.667 


2.058 

5  per  cent 

5  per  cent 

5.451 

1.946 


4.080 

5.946 

2.000 

5  per  cent 

2.311 

3.120 

_^  6.287 

§  per  cent 

4.000 


Propoited 

Duty 

Rate 

Hk.  Tls. 


1.50 
1.80 


1.50 
2.40 
1.50 

1.70 

•  •   «   • 

1.40 
2.40 

1.70 


1.70 


Name  of  Article 


0.57 

0.26 
0.38 


0.13 


0.27 
0.10 


0.20 
0.30 
0.10 

b.i2 
0.16 
0.31 

•  •  •  • 

0.20 


Sheets  and  Plates  under  %  of  an  inch 

thick    

Tacks    

Wire    

Wire  Rope,  Galvanized  or  Ungalvanized. 

Wire  with  or  without  fibre  core 

Steel,  Tool  and  Spring: 

Bamboo   Steel 

Spring  Steel 

Tool  Steel   (including  High-speed) 

Steel      

Iron  and  Steel,  Galvanized: 

Bolts,  Nuts,  Rivets,  and  Washers 

Pipes,  Tubes,  and  Tube  Fittings 

Screws    

Sheets,  Corrugated  and  Plain 

Wire  

Wire  Rope.     See  Ungalvanized. 
Wire  Shorts.    See  Ungalvanized. 

Iron  and  Tin  Dross 

Lead: 

Old  (fit  only  for  remanufacture) 

Pigs  or  Bars  

Pipe 

Sheet    

Wire    

Manganese    

Manganese  Ferro   \\\ 

Nickel    

Quicksilver    

Tin:  

Compound    

Dross  and  Refuse  

Ingots  and  Slabs 

Pipe  

Sheet    

Tinned  Tacks 

Tinned  Plates,  Decorated 

Tinned  Plates,  Plain   

Tinned  Plates,  Old 

Type  Metal *.'.".'.*.".'.".'.". 

White  Metal  or  German  Silver : 

Bars,  Ingots,  and  Sheets 

Wire    .'..'*.".*..'.' 

Zinc : 

Powder  and  Spelter  

Sheets    (including    Perforated),    Piates. 
and  Boiler  Plates 


Agreed  Value 


Per 


picul 


M 

U 
U 


value 

value 
(( 

it 
picul 


picul 


Hk.Tls. 


5.000 

9.047 

5.241 

14.924 


5.486 
6.420 

5  per  cent 

5  per  cent 


7.400 
6.072 


6.000 


value 

5  per  cent 

•  •  •  • 

picul 

^.000 

0.45 

« 

9.961 

0.50 

(( 

11.H34 

0.59 

value 

5 per cent 

it 

•  •  •  • 

•  •    •  • 

picul 

i( 
70.000 

■   ■    •  « 

3.50 

(( 

126.654 

6.30 

value 

5  per  cent 

•  •  •  • 

picul 

10.8B^ 

0.54 

(( 

45.462 

2.30 

Malue 

5  per  cent 

picul 

CI  .208 

2.10 

it 

9.047 

0.45 

it 

10.176 

0.51 

tt 

7.800 

0.39 

value 

5  per  cent 

ii 

a     •      •     • 

picul 

54.531 

2.70 

(( 

43.444 

2.20 

picul 

12.916 

0.65 

tt 

16.849 

0.84 

Proposed 
Duty 
Rate 
Hk.  Tls. 


0.20 
0.45 
0.26 
0.75 


0.27 
0.32 


0.37 
0.30 


0.30 


378 


I    I 


TRADING  WITH  ASIA 
Food,  Drink  and  Medicine 


CHINESE  TARIFF 


379 


Name  of  Article 


^r 


Fishery  and  Sea  Products: 

Agar-agar    

Awabi,  in  bulk  

Bicho  de  Mar,  Black,  Spiked 

Bicho  de  Mar,  Black,  not  Spiked 

Bicho  de  Mar,  White   

Cockles,  Dried  

Cockles,  Fresh 

Compoy   

Crabs'  Flesh,  Dried   .............. 

Fish  Bones   

Fish  Cod,  Dried 

Fish,  Cuttle  '.'..'.■ 

Fish,  Dried  and  Smoked   (not  including 

Dried  Codfish  and  Cuttle-fish) 

Fish,  Fresh 

Fish,  Maws,  1st  Quality   ( i.  e.,  weighing 

1  catty  or  over  per  piece ) 

Fish,  Maws,  2nd  Quality  (i.e.,  weighing 

under  1  catty  per  piece) 

Fish,  Salmon  Bellies  

Fish,  Salt   

Fish,   Skin    

Mussels,  Oysters,  and  Clams,  Dried 

Prawns  and  Shrimps,  Dried,  in  bulk  . .  . 

Seaweed,  Cut   

Seaweed,  Long 

Seaweed,  Prepared   

Seaweed,  Red 

Sharks'  Fins,  Dorsal  and  Tail 

Sharks'  Fins,  Breast  Fins 

Sharks'  Fins,  Prepared 

Seaweed  Skins 

Inimal  Products,  Canned  Oooda,  and  Oro 
ceries : 

Bacon  and  Hams,  in  bulk 

Baking  Powder  , 

Beef,  Corned  or  Pickled,  in  Barrels 

Birds'  Nests,  Black   (including  Clarified 

Refuse)    , , , 

Birds'  Nests,  White 

Butter    

Canned  Goods: 
Asparagus    


Agreed  Value 


Per 


picul 


« 
(( 
(( 
(( 
(C 
ft 


value 
picul 


« 


ft 


catty 

picul 

value 

picul 
« 

ft 

(f 

f( 

ft 


value 

picul 

(( 

if 
value 


picul 

value 
It 


catty 

m 

picul 
picul 


Hk.  Tla. 


6.000 

52,500 

63.300 

40.000 

20.000 

13.822 

1.200 

43.000 

1«.518 

5  per cent 

5.800 

13.600 

9.739 
6.410 

5.000 

66.500 
5  per  cent 
3.600 
12.711 
10.000 
22.000 
3.334 
2.500 
26.000 
5  p«'r  cent 
88.660 
37.173 
128.562 
5  per cent 


35.300 
5  per  cent 


3.000 
18.000 
53.270 

17.500 


Proposed 

Duty 

Rate 

Hk.  Tls. 


0.30 
2.60 
2.70 
2.00 
1.00 
0.69 
0.06 
2.15 
0.83 

a     •     •     • 

0.29 
0.68 

0.49 
0.32 

0.25 

2.80 

•  •   ■   • 

0.18 
0.64 
0.80 
1.10 
0.17 
0.13 
1.30 

•  •   •   ■ 

4.40 
1.90 
6.40 


1.80 


0.15 
0.90 
2.70 

0.8g 


Name  of  Article 


Cream  and  Milk,  Evaporated  or  Steril- 
ized     

Fruits,  Table  and  Pie 

Milk,  Condensed   

Canned  Goods,  Unenumerated  

Chocolate    

Cocoa    

CoflFee   

Currants  and  Raisins,  in  bulk 

Fruits,  Preserved,  in  Glass,  etc 

Honey    

Jams  and  Jellies 

Lard,  in  bulk 

Macaroni  and  Vermicelli,  in  bulk 

Margarine    

Meats,  Dried  and  Salted 

Pork  Rind 

Sausages,  Dry  

Soy   

Tea    

Cereals,     Fruits,     Medicinal     Substances, 
Seeds,  Spices,  and  Vegetables: 
Aniseed,  Star: 
(a)   Ist  Quality  (value  Hk.  Tls.  15  and 

over  per  picul)    

(6)  2nd  Quality  (value  under  Hk.  Tls. 

15  per  picul )    

Apples,  Fresh 

Asafoetida   

Barley,  Pearl  

Beans  and  Peas 

Betelnuts,  Dried   

Betelnut  Husk,  Dried   

Bran    

Cereals  and  Flour  (including  Barley, 
Maize,  Millet,  Oats,  Paddy,  Rice, 
Wheat,  and  Flour  made  therefrom; 
also  Buckwheat  and  Buckwheat  Flour, 
Cornflour  and  Yellow  Corn  Meal,  Rye 
Flour,  and  Hovis  Flour;  but  not  in- 
cluding Arrowroot  and  Arrowroot 
Flour,  Cracked  Wheat,  Germea,  Hom- 
iny, Pearl  Barley,  Potato  Flour. 
Quaker  Oats,  Rolled  Oats,  Sago  and 


Agreed  Value 

Per 

Hk.Tls. 

Incl.  weight 
of  immediate 
packing. 

picul 

24.000 

ft 
tt 

value 
ft 

13.000 

14.500 

19.200 

5percent 

ft 

tt 

tt 

tt 

picul 
value 

12.577 

5percent 

it 

It 

tf 

ft 

(( 

picul 

value 

ft 

9.125 
5^ercent 

ft 

(( 

tt 

a 

picul 
value 

6.000 
5percent 

picul 

20.000 

ft 
value 

9.000 
5.000 

5  per  cent 

tt 

(( 

tf 

picul 

4.700 
2.300 
1.600 

1 

Preposed 
Duty 
Rate 
Hk.  Tls. 


1.20 

0.65 
0.73 
0.96 


0.63 


0.46 


0.25 


1.00 

0.45 
0.25 


0.24 
0.12 
0.08 


380 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


381 


n 


11 


Name  of  Article 


Sago  Flour,  Shredded  Wheat,  Tapioca 
and  Tapioca  Flour,  and  Yam  Flour) 

Camphor,  Crude  and  Refined 

Camphor,  Baroos,  Clean 

Camphor,  Baroos,  Refuse 

Capoor  Cutchery 

Cardamon  Husk   *.*.',. 

Cardamons,  Inferior    ...*.*.*..... 

Cardamons,  Superior !.*..!...!'. 

Cassia  Lignea  and  Buds 

Cassia  Twigs 

Chestnuts    .*.*..*.'. 

China-root 

Cinnamon,  in  bulk *!.!!.!..'! 

Cloves,  in  bulk 

Cloves,  Mother V. ....'.'..',... ... 

Cocaine   .'..'.*..* 

Galangal    **.  .*.*.*  *.**.*. 

Ginseng,  Clarified  or  Cleaned: 

Ist  Quality    (value  over  Hk.  Tls.   25 

per  catty)   

2nd  Quality   (value  over  Hk.  Tls!   ii 

and  not  over  Hk.  Tls.  25  per  catty) 

3rd  Quality  (value  over  Hk.  Tie.  3  and 

not  over  Hk.  Tls.  11  per  catty)  . . . 
4th  Quality  (value  not  over  Hk.  Tls.  3 

per  catty)    

Ginseng,     Crude,     Beard,     Roots,     and 
Cuttings  : 

1st  Quality  (value  over  Hk.  Tls.  3  per 
catty)     

2nd  Quality  (value  not  over  Hk.  tIs  3 

per  catty)    

Ginseng,  Wild  .'.*.*.*.".'."." 

Groundnuts,  in  Shell  

Groundnuts,  Shelled 

Hops 

Isinglass,  Vegetable   .... . .  *. . . . . . .  *. '. . '. " 

Lemons,  Fresh 

Lichees,  Dried   !!!!!!!!!!! 

Lily  Flowers.  Dried  .... . . . . . . . .  . . ." 

Lungngan  Pulp 

Lungngans,  Dried 

Malt  .*.*.*.'.'!.'.'." 

Morphia  in  all  forma  ...... .' .' .' .' .' .' "  * ' 

Mushrooms   

Nutmegs   ....*.'..., 


Agreed  Value 


Per 


picul 
catty 
value 

picul 

i( 

it 

value 

picul 

t( 

ft 
t( 

value 
picul 


catty 


(( 


u 


value 
picul 

value 
picul 
thous 

picul 

It 

¥ 
it 
ttt 

value 

picul 
ft 


Hk.  Tls. 


free 
66.000 
62.000 
5  per  cent 


tt 


5.000 

20.000 

200.000 

18.000 

3.600 

5  per cent 

14.000 

100.000 

18.000 

8.000 

5  per  cent 

3.700 


56.000 

22.000 

7.200 

1.800 

4.400 

1.700 
5  per  cent 
3.000 
4.600 
5  per  cent 
53.000 
20.000 
10.600 
0.400 
l.'^.OOO 
7.600 
8.102 
5  per  cent 
47.000 
30.000 


Proposed 
Duty 
Rate 

Hk.  Tls. 


3.30 
3.10 


0.25 
1.00 
10.00 
0.90 
0.18 

•  ■    •  • 

0.70 
6.00 
0.90 
0.40 

•  *    •   ■ 

0.19 


2.80 
1.10 
0.36 
0.09 

0.22 
0.085 

•  a      •     • 

0.15 
0.23 

•  •    •   • 

2.70 
1.50 
0.63 
0.47 
0.65 
0..38 
0.41 

2.40 
1.50 


Name  of  Article 


Olives    

Opium,  Tincture  of 

Oranges,  Fresh 

Peel,  Orange,  in  bulk 

Pepper,  Black   

Pepper,  White 

Potatoes,  Fresh 

Putchuck    

Seed,  Apricot 

Seed,  Lily  Flower  (i.  e.,  Lotus- 
nuts  without  Husks)    

Seed,  Lucraban  

Seed,  Melon    

Seed,  Pine  (i.  e.,  Fir-nuts) 

Seed,  Sesamum   

Vegetables,  Dried,  Prepared,  and 
Salted   

Bugar: 

Sugar,  Brown,  under  No.  11 
Dutch  Standard,  and  "Green 
Sugar'*    

Sugar,  White,  over  No.  10  Dutch 
Standard  ( including  Refined 
Sugar )     

Sugar,  White,  Cube  and  Loaf 

Sugar,  Candy 

Sugar,  Cane  

'Wines,  Beer,  Spirits,  Table  Waters, 

etc.  : 

Champagne  and  any  other  Wine 
sold  under  the  label  Cham- 
pagne"     

Sparkling  Asti  

Other  Sparkling  Wines 

Still  Wines,  Red  or  White,  exclu- 
sively the  produce  of  the  nat- 
ural fermentation  of  gtape? 
not  including  Vins  de  Li- 
queur)     

(1)  In  Bottles 

Port  Wine,  in  Bottles 

Port  Wine,  in  bulk ' 

Marsala,  in  Bottles 

Marsala,  in  bulk 


Agreed  Value 


Per 


value 
value 
picul 


it 
tt 


tt 


value 
picul 


(( 


picul 


ft 
it 


it 
tt 


value 


picul 


tt 
tt 


ti 


it 


half -bottles 


Hk.  Tls. 

5  per  cent 

5  per  cent 

3.600 

13.000 

19.400 

32.000 

5  per  cent 

38.000 

26.800 

20.000 
7.000 

11.000 
4.800 
4.800 

5  percent 


4.400 


6.200 

10.000 

7.400 

1.000 


{       Case  of       "\ 
12  bottles  or  ] 
^24  %  bottles  J 


f       Case  of 
\  12  bottles  or 
[24  %  bottles 
Imperial  gallon 

Case  of 
12  bottles  or 
24  %  bottles  J 
mperial  gallon 

Case  of 

12  bottles  or 

24  ^  bottles 

Imperial  gallon 


20.000 

10.000 
12.000 


\ 


6.000 
0.700 
14.000 


3.500 


8.000 
2.000 


Proposed 
Duty 
Rate 
Hk.  Tls. 


0.18 
0.65 
0.97 
1.60 

1.90 
1.30 

1.00 
0.35 
0.55 
0.24 
0.24 


0.22 


0.31 
0.50 
0.37 
0.05 


1.00 

0.50 
0.60 


0.30 

0.035 

0.70 

0.18 

0.40 

0.10 


382 


TRADING  WITH  ASIA 


!V 


hi. 


••  I 


i      ! 


Name  of  Article 


Vina  de  Liqueur  other  than  Port 
and  Marsala  (viz.,  Madeira, 
Malaga,  Sherry,  etc.)  : 


(1)  In  Bottles 
'<2)   In  bulk   .. 


Agreed  Value 


Per 


Vermouth,  Byrrh,  and  Quinquina 
Sak6,  in  Barrels 


Sak6,  in  Bottles 


Ale,  Beer,  Cider,  Perry,  and  sim 
ilar  Liquors  made  of  Fruit* 
and  Berries: 

(1)  In  Bottles  

(2)  In  Casks   

Porter  and  Stout,  in  Bottles 

Porter  and  Stout,  in  Casks 

Brandy,  Cognac,  and  Whisky,  in 
bulk    

Brandy  and  Cognac,  in  Bottles  . 

Whisky,  in  Bottles    

Gin,  in  Bottles 

Gin,  in  bulk   

Other  Spirits  {i.e.,  Rum,  Aquavit, 
Vodka,  Punch,  etc.) : 

(1)  In  Bottles  

(2)  In  bulk   

Liqueurs  

Waters,  Table,  Aerated  and  Min- 
eral    


Case  of 
12  bottles  or 
24  %  bottles  , 
Imperial  gallon 

Case  of  12  litres. 

picul 
f    12  reputed    "1 
j  quarts  or   24  [ 
[reputed  pints  J 


1 


12  reputed 

quarts  or   24 

reputed  pints 

Imperial  gallon 

f    12  reputed 
{  quarts  or  24 
!  reputed  pints 
Imperial  gallon 


12  bottles     1 
or  24  %       }. 

o  •  -A        *    T^.  L       bottles        I 

Spirits    of    Wme    and    Rectified  ^ 

Spirits  or  Alcohol  I  Imperial  gallon 


f       Case  of 
12  reputed 
quarts 


I 


I         quarts        J 
« 

Imperial  gallon 

("  Case  of  "I 
12  reputed  f 
f  quarts  J 
Imperial  gallon 
r  12  reputed  ] 
<  quarts  or  24 
[reputed  pints 


I 


f 


Hk.  Tls. 


10.000 

3.00 
5.800 
8.200 

2.000 


1.580 
0.540 

2..560 

0.550 

2.6(10 

13.400 

7.000 

4.noo 

1.800 

4.000 

1.800 

10.000 

1.400 
0.560 


Proposed 

Duty 

Rate 

Ilk.  Tls. 


0.50 

.015 
0.29 
0.41 

0.10 


0.079 
0.027 

0.1.3 

0.028 

0.13 

0.67 

0.35 
0.23 
0.09 

0.20 
0.09 
0.50 

0.07 
0.028 


CHINESE  TARIFF 


Tobacco 


383 


Name  of  Article 


Agreed  Value 


1,000  . . . 
1.50  but 
1,000 


Cigarettes,   value   over   Hk.    Tls.   4.50   per 
1,000  and  all  Cigarettes  not  bearing 
a  distinctive  brand  or  name  on  each 
thousand    

Cigarettes,   value  over   Hk.   Tls.   3.00  but 
not  over  Hk.  Tls.  4.50  per 

Cigarettes,   value   over   Hk.   Tls. 
not  over  Hk.  Tls.  3.00  per 

Cigarettes,  value  Hk.  Tls.  1.50  or  less  per 
1,000    

Cigars    

SnuflF    

Tobacco,  Leaf 

Tobacco,    Prepared,    in    tins    or    packages 
under  5-lb.  each 

Tobacco,  Prepared,  in  bulk  (not  packed  in 
tins  or  tin-lined  cases)    

Tobacco,  Stalk  


Per 


Hk.  Tls. 


« 

value 
picul 

value 

picul 
« 


6.600 

3.800 

2.200 

1.200 
16.000 

5  per  cent 
22.000 

6  per  cent 

22.000 
5.600 


Chemicals  and  Dyes 


Acid,  Acetic   

Acid,  Boracic   

Acid,  Carbolic   

Acid,  Hydrochloric   (i.e..  Muriatic)  .... 

Acid,  Nitric    

Acid,  Sulphuric 

Ammonia,  in  bulk 

Ammonia,  Chloride  of   (Sal  Ammoniac. 

Opium,  Tincture  of 

Ammonia,  Sulphate  of 

Bleaching  Powder   (Chloride  of  Lime).. 

Borax,  Crude  or  Refined 

Calcium,  Carbide  of  

Copper,  Sulphate  of 

Glycerine    

Hide  Specific  

Manure,  Animal,  Chemical,  or  Artificial, 

not  otherwise  enumerated 

Naphthalene   

Saltpetre    

Soda  Ash 

Soda,  Bicarbonate  of,  in  bulk 

Soda,  Caustic 

Soda,  Crystal 

Soda,  Crystal  Concentrated ,/,. 


picul 
ft 

value 
value 

picul 

« 

*t 
value 

(C 

t< 
u 
u 
it 
(( 

value 

picul 
(( 

*i 

ft 

tt 

(C 

tf 
u 


30.639 
21.448 

5  per  cent 

6  per  cent 
14.282 

3.317 
26.513 
17.823 
5  per  oent 

7438 

5.469 
11.521 

7.451 
11.912 
43.930 
5  per  cent 

2.951 
12.653 
9.324 
2.499 
2.899 
6.200 
2.659 
3.178 


Proposed 
Duty 
Rate 
Hk.  Tla. 


0.33 

0.19 

0.11 

0.06 
0.80 

•   •   •  « 

1.10 


1.10 

0.28 


1.50 
1.10 


0.71 
0.17 
1.30 
0.89 

■   •   •   • 

037 
0.27 
0.58 
0.37 
0.60 
2.20 


0.15 
0.63 
0.47 
0.12 
0.14 
0.31 
0.13 
016 


384 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


385 


<r> 


-fl 


Name  of  Article 


Dyes  and  Pigments: 
Soda.  Nitrate  of  (Chile  Saltpetre)  . 

Soda,  Silicate  of ......... 

Aniline  Dyes  not  otherwise  enunierated 

Bark,  Mangrove 

Bark,  Plum-tree .' 

Bark,  Yellow  ( for  Dyeing)  ......,[",' 

Blue,  Paris  or  Prussian 

Bronze  Powder   ". !  *   * 

Carbon  Black  (i.e.,  Lampblacic)  '. 

Carthamin    

Chrome  Yellow 

Cinnabar   * 

Cobalt,  Oxide  of  . . .  .* .' .* .* .* .* .' .* .* .'.'.*.' 

Cochineal    *  * 

Cunao  or  False  Gambier 

Cutch  or  Gambier 

Dyes  and  Colours,  Unclassed  . . . .  .*  .* .' ." 
Gamboge    

Green,  Emerald,  Schweinfurt!  or  Imita- 
tion     

Hartall  (Orpiment)    .!..*!..'.'.*.',"] 

Indigo,  Dried,  Artificial 

Indigo,  Liquid,  Natural ,...[, 

Indigo,  Liquid  or  Paste,  Artificial  ,,.... 

Indigo,  Liquid,  Natural 

Indoin    

Laka-wood    , ".'. 

Lead,  Red,  White,  and  Yellow '.'.**. *.'.*.'.*.* 

Logwood  Extract   

Nutgalls    ..!..!."!.!!* 

Ochre '.!!!.!!.! 

Safflower   

Sapanwood   

Smalt   

?;f"^^"^ ';;;;*'!;;:;:;; 

Ultramarine  - 

Vermilion    .'......"" 

Vermilion,  Artificial 

White  Zinc • 


Agreed  Value 


Per 


picul 


value 

picul 
« 

« 

<v 

(( 

(( 

value 

picul 
value 
value 
picul 

value 
picul 

w 
«( 
<( 
ft 

€€ 
€t 

value 

picul 
ft 

K 
« 
t( 
tt 
€€ 
«S 
U 
(C 

*  1 

value 
value  ; 


Hk.  Tls. 


5.342 

3.603 

5  per  cent 

1.682 

3.187 

4.948 

34.945 

52.979 

20.000 

5  per  cent 

82.400 

5  per  cent 

5  per  cent 

3.340 

10.000 
5 per cent 

56.951 

22.458 

9.562 
125.881 

6.000 
40.000 

6.000 
5  per cent 

3.272 
10.294 
15.492 

0.863 

6.545 
12.908 

2.744 
40.150 

3.938 

13.862 

82.400 

5 per cent 

5 per cent 


Proposed 
Duty 
Rate 

Hk.  Tli. 


0.27 
0.18 

•  ■    •   • 

0.084 

0.16 

0.25 

1.70 

2.60 

1.00 


4.10 


0.17 
0.50 

2.80 

1.10 
0.48 
6.30 
3.00 
2.00 
0.30 

•   •    «  • 

0.16 
0,51 
0.77 
1.00 
0..33 
6.65 
0.14 
2.00 
0.20 
069 
4.10 


Candles,  Gums,  Oils,  Soap,  Vabnishes,  Wax  and 

Manufactubes  of 


Candles    

Candlewick 

Gasolene,  Naphtha,  and  Benzine,  Mineral  i 
(a)  In  bulk iq 


picul 
tf 


Am.  galls. 


14.600 
75.200 

3.000 


0.63 
4.15 

0.15 


Name  of  Article 


(b)  In  case 


Grease,    Lubricating,    wholly    or    part 

mineral    

Gum  Arabic  

Gum  Benjamin   

Gum  Copal  

Gum  Dragon's-blood   

Gum  Myrrh  

Gum  Olibanum 

Gum  Resin   

Gum  Shellac 

Gum  Sticklac 

Gum  Tragacanth  

Oil,  Castor,  Lubricating   

Oil,  Castor,  Medicinal 

Oil,  Coconut  

Oil,  Kerosene: 


(a)  In  case 


(5)  In  bulk 

(c)   Tins,  empty 

id)  Case  and  two  empty  tins  . . . 

Oil,  Linseed 


Oil,  Lubricating: 

(a)  Wholly    or    partly    of    Mineral 

origin    

(6)   Other  kinds,  not  otherwise  enu 

merated  

Oil,  Olive,  in  bulk 


Soap,  Household  and  Laundry  (includ- 
ing Blue  Mottled),  in  bulk.  Bars, 
and  Doublets:  duty  to  be  charged 
on  nominal  weights,  provided  that 
such  weights  be  not  less  than 
true  weights  and  that  a  bar  does 
not  weigh  less  than  7-oz 

Soap,  Toilet  and  Fancy 

Stearine    

Turpentine : 

(a)  Mineral 

(6)   Vegetable     

Wax,  Bees,  Yellow 


Agreed  Value 


Per 


f  Case  of  2 
•{  tins,  each  of 
[  5  Am.  galls. 


picul 


ft 

u 
u 
u 
w 
u 
tt 
cc 
« 

M 

« 


value 
picul 

Case  of  2 
tins,  each  of 
5  Am.  galls.  ^ 
10  Am.  galls^ 
tin 
each 
C  Imperial ) 
\    gallon    ) 


J    Am 
I  gallon 


.1 


(( 


C  Imperial ) 
I   gallon   5 


picul 
value 
picul 

[  Imperial ) 
[   gallon    J 

picul 


Hk.  Tls. 


3.500 


7.000 

24.000 

12.000 

24.000 

60.000 

9.600 

9.600 

6.800 

40.000 

15.000 

18.000 

12.000 

5  per  cent 

16.000 


2.200 

1.000 
0.200 
0.540 

1.200 


0.300 

0.500 
2.000 


8.800 

5  per  cent 

19.600 

0.600 

0.800 
32.000 


Proposed 
Duty 
Kate 
Hk.  Tls. 


0.18 


0.35 
1.20 
0.60 
1.20 
3.00 
0.48 
0.48 
0.34 
2.00 
0.75 
0.90 
0.60 

0.80 


0.11 

0.06 
0.01 
0.027 

0.06 


0.015 

0.025 
0.10 


0.44 

•  •   •  • 

0.98 

0.03 

0.04 
1.60 


386 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


387 


Name  of  Article 


Wax,  Paraffin  . 
Wax,  Vegetable 


Agreed  Value 


Per 


picul 


K 


Hk.  ris. 

10.00 
15.200 


Paper,  Wood  Pulp,  Books,  and  Maps 


Paper,  Cigarette,  on  bobbins   

Paper,  Common  Printing,  Calendered  and 
Uncalendered,  Sized  and  Unsized, 
White  and  Coloured 

Paper,  Marbled,  Enamelled,  and  Glazed 
Flint    

Paper,  M.  G.  Cap,  White  and  Coloured  .... 

Paper,  Packing  and  Wrapping,  Brown   or 

Coloured    

Paper,  Printing,  Calendered  and  Uncalen- 
dered,  Sized  and  Unsized,  White  and 
Coloured  (including  Simile  and  M. 
G.  Poster,  but  not  including  Print- 
ing Paper  otherwise  enumerated), 
free  of  mechanical  wood  pulp 

Paper,  Strawboard   

Paper,   Unenumerated    

Paper,  Unglazed  Tissue  and  M.  G.  Bieachel 
Sulphite,  free  of  mechanical  wood 
PuJp    

Paper,  Writing,  Drawing,  Art  Printing, 
Bank-note,  Parchment,  Pergamyn, 
and  Grease-proof 

Wood  Pulp,  Chemical '. 

Wood  Pulp,  Mechanical  : 

(a)   Dry    

(6)   Wet    (not  containing  less   than   40 
per  cent  moisture, 

Books   

Charts  and  Maps 

Newspapers  and  Periodicals 


picul 


K 


U 


tt 


value 


picul 

value 
picul 

(( 


40.00 


6.40 

12.20 
6.40 

6.40 


9.20 
5  per  cent 


«• 


L 


10.00 


5  percent 
6.00 

3.32 

1.06 

free 
« 


Animat,  Substances,  Raw  and  Prepared 


Hides,  Leather,  and  Skins   {Furs)  : 

Hides,  Buffalo  and  Cow 

Leather  Belting 

Leather,  Calf,  Kid,  Enamelled,  Japanned, 

Patent,  and/or  Coloured   

Leather,  Cow   (including  that  for  Soles 

and  Harness)   


picul 
value 

22.00 
5  per  cent 

picul 

300.00 

t( 

58.00 

Proposed 

Duty 

Rate 

Hk.  Tls. 

0.50 
0.76 


2.00 


0.32 

0.61 
0.32 

0.32 


0.46 


0.50 

•   •   •   ■ 

0.30 
0.17 
0.083 


1.10 

«   •   •  • 

15.00 
2.90 


Name  of  Article 


Leather,  Cow,  Enamelled,  Japanned,  and 

Patent   

Skins  ( Furs) ,  Beaver   

Skins  (Furs),  Dog   

Skins  (Furs) ,  Fox   

Skins  ( Purs ) ,  Fox,  Arctic,  White 

Skins  ( Furs) ,  Fox  Legs    

Skins  ( Furs) ,  Fox,  Red    

Skins  ( Furs) ,  Goat,  Tanned    

Skins  ( Furs ) ,  Goat,  Un tanned    

Skins  ( Furs ) ,  Hare  and  Rabbit 

Skins  (Furs) ,  Lamb    

Skins  (Furs) ,  Lamb,  Unborn   

Skins  ( Furs ) ,  Land-otter   

Skins  ( Furs ) ,  Lynx    

Skins  ( Furs) ,  Marten,  Untanned   

Skins  ( Furs) ,  Musquash    

Skins  ( Furs) ,  Raccoon   

Skins  ( Furs) ,  Sable    

Skins  ( Furs ) ,  Sheep,  Untanned    

Skins  ( Furs) ,  Squirrel   

Skins  (Furs),  Wolf   

Bones,    Feathers,    HaiVf    Horns,    Shells, 
Sinews,  Tusks,  etc.: 

Bones,  Tiger 

Cow  Bezoar,  Indian   

Crocodile  and  Amadillo  Scales 

Elephants'  Tusks,  Whole  or  Parts  of  . . . 

Feathers,  Kingfisher,  Whole  Skins 

Feathers,   Kingfisher,   Part   Skins    ( i.  e., 

Wings,  Tails,  or  Backs ) 

Feathers,  Peacock 

Hair,  Horse 

Hair,  Horse  Tails 

Horns,  Buffalo  and  Cow 

Horns,  Deer   

Horns,  Deer,  Old 

Horns,  Deer,  Young  (Northern) 

Horns,  Deer,  Young  (Southern) 

Horns,  Rhinoceros 

Musk    

Sea-horse  Teeth 

Sinews,  Cow  and  Deer 


Agreed  Value 
Per        Hk.  Tls. 


picul 

value 
(( 

it 

it 

t( 

(( 

(( 

(( 

(( 

(C 

ft 

« 
It 

if 
tt 
tt 
a 
tt 
tt 
It 


picul 
value 
picul 
hund 
catty 


value 

picul 

tt 

ft 

ft 
ft 

pair 
value 

catty 

ft 

value 
picul 


180.00 
5  per  cent 


a 
ft 
(t 
ft 
tt 
tt 
ft 
tt 
tt 
tt 
tt 
if 
(i 
it 
(( 
f( 
tt 
« 


Proposed 
Duty 
Rate 
Hk.  Tls. 


56.00 

5  per  cent 

59.00 

3.60 

12.00 

8.00 
5  per  cent 

42.00 

50.00 

13.00 

34.00 
140.00 

50.00 
5  per  cent 

80.00 
180.00 
5  per  cent 

20.00 


ril 


Timber,  Wood,  Bamboos  and  Rattans 


9.00 


2.80 

3.66 
0.18 
0.60 

0.40 

2.16 
2.50 
0.65 
1.70 
7.00 
2.50 

4.66 
9.00 

•   •   •  • 

1.00 


Timber: 
lAths 1,000   I  pieces  I     4.20      I      0.21 


I      'r 


\§\ 


■     . 


TRADING  WITH  ASIA 


Ordinary  (not  including  Teak  and  other 
enumerated  Woods),  Rough  Hewn: 
Hardwood  


Softwood 


Ordinary,  Sawn: 
Hardwood   . . . , 
Softwood 


Ordinary,  Manufactured  (including  any 
process   further   than   simple   saw- 
ing), exclusive  of  Masts  and  Spars: 
Hardwood : 
(a)  Clear    


ib)  Merchantable 

Softwood : 
(a)  Clear    


( h )  Merchantable  

Ordinary,  Masts  and  Spars  . . . 

Railway   Sleepers    

Teak-wood,  Beams  and  Planks 


Wood,  Bamhoost  Rattans,  etc.: 

Canes,  Bamboo 

Rattan  Skin * 

Rattans,  Core  or  Whole 

Rattans,  Split  

Wood,  Camagon    

Wood,  Camphor    

Wood,  Ebony   

Wood,  Fragrant    , 

Wood,  Garoo    

Wood,  Kranjee    

Wood,  Laka.     See  Dyes. 
Wood,  Lignum-vitsB 

Wood,  Oil   *... 

Wood,  Puru   

Wood,  Red  and  Rose 

Wood,  Sandal  

Wood,  Sandal  Dust    . . . . 

Wood,  Span.     See  Dyes. 

Wood,  Scale  Sticks    

Wood,  Scented    


Agreed  Value 


Per 


1,000   sup. 
ft.,  B.M. 


It 


Hk.  TU. 


Proposed 
Duty 
Rate 

Hk.  Tls. 


1,000   sup. 
ft.,  B.M. 


it 


1,000   sup. 
ft.,  net 
measure 
B.M. 

1,000    sup. 

ft.,  net 

measure 

B.M. 
tt 

value 

1,000    sup. 
ft.,  B.M. 

thousand 
value 
picul 

tt 
ft 


29.00 
23.00 


36.00 
30.00 


value 


(( 


tt 


catty 
value 

value 

catty 
it 

picul 
value 


piece 


60.00 
42.00 


60.00 

36.00 

6  per  cent 
t( 

135.00 

8.40 
6  per  cent 
15.00 
6.41 
6.70 
3.20 

5  per  cent 

tt 

tt 

2.40 

5  per cent 

6 per cent 

1.80 
4.10 
8.60 

6  per  cent 

0.18 


1.45 
1.15 


1.80 
1.50 


3.00 
2.10 


2.60 
1.80 


6.75 
0.42 

•   •    •  • 

0.76 
0.32 
0.34 
0.16 


0.12 


0.09 
0.21 
0.43 


0.009 


CfflNESE  TARIFF 


389 


Name  of  Article 


Wood,  Shavings,  Hinoki    

Wood,  Veneer    

In  this  Tariff,  by  Softwood  is  meant 
the  wood  of  any  coniferous  tree  and  of  all 
trees  with  "needle"  or  spinous  leaves,  e.g., 
Pines,  Firs,  Spruces,  Larches,  Cedars, 
Yews,  Junipers,  and  Cypresses.  The  wood 
of  all  trees  with  broad  leaves  is  to  be 
classed  as  Hardwood. 


Agreed  Value 
Per        Hk.  Tls. 


value 


5  per  cent 


Proposed 
Duty 
Rate 
Hk.  Tls. 


Coal,  Fuel,  Pitch  and  Tab 


Coal    

Coal,  Briquettes 

Charcoal    

Coke   

Liquid  Fuel  

Pitch    

Tar,  Coal   


ton 

5.400 

« 

10.000 

picul 

1.093 

ton 

10.902 

tt 

14.572 

picul 

4.709 

« 

1.600 

Basins,  Tin 

Chinaware     

Enamelled  Ironware: 

Mugs,  Cups,  Basins,  and  Bowls,  not  over 

1 1  centimetres  in  diameter  

Basins  and  Bowls,  over  22  centimetres 
but  not  over  35  centimetres  in  diame- 
ter     

Enamelled  Ironware,  Unenumerated  .... 

Glass  and  Crystal  Ware 

Glass  Plate,  Silvered,  Bevelled  or  Unbev- 

elled,  not  over  5  square  feet  each 

Glass  Plate,  Silvered,  Bevelled  or  Unbev- 

elled,  over  5  square  feet  each 

Glass  Plate,  Unsilvered 

Glass  Window,  Common,  not  over  32  oz.  in 
weight  per  square  foot 


Glass  Window,  Coloured 
Glass  Mirrors 


gross 
value 

6.000 
5  per  cent 

dozen 

1.000 

value 

2.000 
5  per  cent 

sq.    ft. 

0.560 

tt 
value 

0.840 
5  per  cent 

100 

sq.  ft. 

It 

value 

5.000 

12.000 

5  per  cent 

0.27 
0.50 
0.05 
0.55 
0.73 
0.24 
0.08 


Chinaware,  Enamelled  Ware,  Glass,  etc. 


0.30 

•  •  •  • 

0.05 
0.10 

•  •   •  • 

•  •    •  • 

0.028 
0.042 


0.25 
0  60 


Earth,  Precious  Stones,  Stones  and  Articles  Made  Op 


Amber    , 

Cement    

Coral  Beads 

Cornelian  Beads 


value 

5  per  cent 

picul 

0.900 

catty 

16.000 

value 

5  per  cent 

0.045 
0.80 


390 


TRADING  WITH  ASIA 


CHINESE  TARIFF 


391 


'ii> 


Name  of  Article 


Miscellaneous 

Cornelian  Stones,  Bough 

Corundum  Sand 

Emery  and  Glass  Powder 

Emery-cloth  and  Sand-paper 

Fire-bricks 

Fireclay 

Flints  (including  Flint  Pebbles) 

Tiles ;;■;; 

Asbestos: 

Asbestos  Boiler  Composition   

Asbestos  Fibre  and  Metallic  Packing  . . 

Asbestos  Millboard   

Asbestos  Sheets  and  Packing  .......... 

Asbestos  Yarn   


Bags,  Mats,  and  Matting: 

Bags,  Cotton,  New  

Bags,  Gunny,  New 

Bags,  Gunny,  Old    

Hemp  or  Hessian  Bags,  New  . 
Hemp  or  Hessian  Bags,  Old 
Bags,  Straw  and  Grass 


Mats,  Coir  (Door)    

Mats,  Fancy .*.*, ,'. 

Mats,  Formosa  Grass  ( Bed )    ...... . '. . . 

Mats,  Rattan   

Mats,  Rush    ' ' 

Mats,  Straw   

Mats,  Tatami , 

Matting,  Coir,  36-in.  by  100  yds 

Matting,  Straw,  36-in.  by  40  yds 

Buttons: 

Buttons,  Fancy  (Glass,  Jewellery,  etc.) . 

Buttons,  Metal  (not  including  those 
made  of  Precious  Metals  or  plated 
with  Precious  Metals)   

Buttons,  Porcelain   

Buttons,  Shell 


hund. 
picul 


value 

picul 

it 

value 


picul 
<( 

(( 

u 

it 


picul 

« 

value 
picul 
value 
thou- 
sand 
dozen 
value 
each 
value 
hund. 

each 

roll  of 

100  yd. 

roUof 

40  yds. 

value 


JP'OSS 

12  gross 
gross 

thou- 


Fa/ns,  Umhrellas,  and  Sunshades: 

Fans,  Palm- leaf,  Coarse   I     sand 

Fans,  Palm-leaf,  Fancy |     « 


6.000 
3.800 
2.400 

•  •   •   ■ 

5  per  cent 
1.220 
0.800 

5  per  cent 

3.600 
64.000 

8.000 
44.000 
40.000 

40.000 
8.480 
5  per cent 
18.900 

5  per cent 

30.000 
8.000 

6  per  cent 

4.700 

6  per cent 

71.000 

5.100 

0.320 

37.100 
6.000 

5  per  cent 


0.400 
0.340 
0.420 


7.000 
20.000 


Proposed 

Duty 

Rate 

Hk.  Tl8. 


0.30 
0.19 
0.12 


0.061 
0.04 


0.18 
3.20 
0.40 
2.20 
2.00 

2.00 
0.42 

0.95 


1.50 
0.40 

•  Hi  «  • 

0.24 

•   ■   •   • 

3.60 
0.26 
0.016 

1.90 

0.25 


0.02 

0.017 

0.021 


0.35 
1.00 


Name  of  Article 


Fans,  Palm-leaf,  Fine  

Fans,  Paper  or  Cotton 

Fans,   Silk    

Umbrellas  and  Sunshades: 

With  Handles  wholly  or  partly  of  Pre- 
cious Metals,  Ivory,  Mother-of-Pearl, 
Tortoiseshell,  Agate,  etc.,  or  Jewelled. 

With  all  other  Handles,  all  Cotton: 

(a)  Length  of  rib  not  over  17-in 

(6)   Length  of  rib  over  17-in 

With  all  other  Handles,  Mixtures,  not 
Silk  

With  all  other  Handles,  Silk  and  Silk 

Mixtures    

Files  and  Needles: 

Files  of  all  kinds: 
Filing  surface  only,  not  over  4-in.  long 
Filing  surface  only,  over  4-in.  but  not 

over  9-in.  long  

Filing  surface  only,  over  9-in.  but  not 

over   14-in.  long   

Filing  surface  only,  over  14-in.  long  . . 

Needles,  Nos.  7/0  and  6/0 

Needles,  Nos.  3/0  and  2/0 

Needles,  Assorted  (not  including  7/^0)   . . 
Matches  and  Match-making  Materials: 

Matches,  Wood,  Safety  or  other: 

Small,  in  boxes  not  over  2-in.  by  1%-in. 
by  %-in 

Large,   in   boxes   not  over   2 %-in.   by 
1%-in.  by  %-in 


In  boxes  over  above  sizes  

Chlorate  of  Potash  

Emery  and  Glass  Powder  

Labels    

Phosphorus   

Wax,  Parafl^ 

Wood  Shavings   

Wood  Splints 

Metal  Threads  and  Foil : 

Thread,  Gold,  Imitation,  on  Cotton 

Thread,  Silver,  Imitation,  on  Cotton .... 

Thread,  Gold  and  Silver,  Imitation,  on 

Silk 


Agreed  Value 

Per 

Hk.  Tls. 

thou- 
sand 

value 

12.000 

47.000 

5  per  cent 

value 

5  per  cent 

value 
each 

5  per  cent 
0.440 

f( 

0.730 

it 

1.300 

dozen 

1.300 

M 

2.700 

(( 

100  mi. 
.( 

it 

5.000 
12.000 
54.000 
50.000 
40.000 

100 

gross 
box 
50 

18.400 

gross 
box 
value 
picul 

value 

picul 

« 

it 
ft 

16.000 

5  per  cent 

3G.000 

2.400 

5 per cent 

70.000 

10.000 

2.200 

2.000 

catty 

3.000 
1.800 

value 

5  per  cent 

Proposed 
Duty 
Rate 
Hk.  Tls. 


0.60 
2.40 


0.022 
0.037 
0.065 

0.065 

0.14 

0.25 
0.60 
2.70 
2.00 
2.00 


0.92 


0.80 

■   •   •   • 

1.80 
0.12 

•  •  •  • 

3.50 
0.50 
0.11 
0.10 

0.15 

o.oe 


392 


TRADING  WITH  ASIA 


Name  of  Article 


Tinfoil  

Sundry : 
Bamboo    Baskets,    Bamboo    Blinds,   and 

other  Bamboo  Ware 

Coir  Yarn  

Cordage  and  Twine 

Emery-cloth  and  Sand -paper    (sheet  not 

over  144  square  inches )    

Furniture  and  other  Woodware  

Glue  (not  including  Fish  Glue)    

Glue,  Cow,  Refuse  

Glue,  Fish   

India-rubber  and  Gutta-percha,  Crude  . . 

Bent-wood  Chairs   

India-rubber,  Old  or  Waste 

Inks  of  all  kinds  

Insect  Powder    

Lampwick   

Leather  Purses   

Machines,  Sewing  and  Knitting 

Mirrors    

Moulding,   Picture    

Oakum  

Rope   

Shoes  and  Boots   

Starch 

Sulphur  

Tinder    ' ' ' 

Worm  Tablets,  in  Bottles,  not  over  60 
pieces  


Agreed  Value 


Per 


Hk.Tl8. 


Proposed 

Duty 

Rate 

Hk.  Tls. 


picul 


value 
« 


ream 
value 
picul 

« 

value 

<( 

K 


picul 
grots 

value 

<( 

i< 

picul 

value 

<< 

(( 
(( 

picul 
do^en 


63.000 


6  per  cent 

a 


5.000 

6  per  cent 

20.000 

20.000 

75.857 

5  per  cent 

tt 

t€ 
t€ 

64.600 

11.200 

5  per  cent 
(( 

(( 

12.600 

5  per  cent 

tt 

({ 
tt 

D.OOO 
0.740 


3.20 


0.25 

1.66 
1.00 
3.80 


2.70 
0.56 


0.63 


0.45 
0.037 


Unenumerated  Goods 


Unenumerated  Goods |   value    |  5percent  I 

Rules 


Rule  I 


Imports  unenumerated  in  this  Tariff  will  pay  Duty  at  the  rate  of  5 
per  cent  ad  valorem;  and  the  value  upon  which  Duty  is  to  be  cal- 
culated shall  be  the  wholesale  market  value  of  the  goods  in  local 
currency.  This  market  value  when  converted  into  Haikwan  Taels 
shall  be  considered  to  be  12  per  cent  higher  than  the  amount  upon 
which  Duty  is  to  be  calculated. 

If  the  goods  have  been  sold  before  presentation  to  the  Customs  of 
the  Application  to  pay  Duty,  the  gross  amount  of  the  bond  fide  con- 
tract will  be  accepted  as  evidence  of  the  market  value.    Should  the 


CHINESE  TARIFF 


893 


goods  have  been  sold  on  c.  f.  and  i.  terms,  that  is  to  say,  without 
uiclusion  in  the  price  of  Duty  and  other  charges,  such  c.  f.  and  i. 
price  shall  be  taken  as  the  value  for  Duty-paying  purposes  without 
the  deduction  mentioned  in  the  preceding  paragraph. 

If  the  goods  have  not  been  sold  before  presentation  to  the  Customs 
of  the  Application  to  pay  Duty,  and  should  a  dispute  arise  between 
Chistoms  and  importer  regarding  the  value  or  classification  of  goods, 
the  case  will  be  referred  to  a  Board  of  Arbitration  composed  as 

follows : 

An  official  of  the  Customs; 

A  merchant  selected  by  the  Consul  of  the  importer;  and 
A  merchant,  differing  in  nationality  from  the  importer,  selected 
by  the  Senior  Consul. 
Questions  regarding  procedure,  etc.,  which  may  arise  during  the 
sittings  of  the  Board  shall  be  decided  by  the  majority.  The  final 
finding  of  the  majority  of  the  Board,  which  must  be  announced 
within  fifteen  days  of  the  reference  (not  including  holidays),  will  be 
binding  upon  both  parties.  Each  of  the  two  merchants  on  the  Board 
will  be  entitled  to  a  fee  of  Ten  Haikwan  Taels.  Should  the  Board 
sustain  the  Customs  valuation,  or,  in  the  event  of  not  sustaining 
that  valuation,  should  it  decide  that  the  goods  have  been  undervalued 
by  the  importer  to  the  extent  of  not  less  than  7%  per  cent,  the 
importer  will  pay  the  fees;  if  otherwise,  the  fees  will  be  paid  by  the 
Customs.  Should  the  Board  decide  that  the  correct  value  of  the 
goods  is  20  per  cent  (or  more)  higher  than  that  upon  which  the 
importer  originally  claimed  to  pay  Duty,  the  Customs  authorities 
may  retain  possession  of  the  goods  until  full  Duty  has  been  paid 
and  may  levy  an  additional  Duty  equal  to  four  times  the  Duty  sought 
to  be  evaded. 

In  all  cases  invoices,  when  available,  must  be  produced  if  required 
by  the  Customs. 

Rule  II 

The  following  will  not  be  liable  to  Import  Duty:  Foreign  Rice, 
Cereals,  and  Flour;  Gold  and  Silver,  both  Bullion  and  Coin;  Printed 
Books,  Charts,  Maps,  Periodicals,  and  Newspapers. 

A  freight  or  part  freight  of  Duty-free  commodities  (Gold  and 
Silver  Bullion  and  Foreign  Coins  excepted)  will  render  the  vessel 
carrying  them,  though  no  other  cargo  be  on  board,  liable  to  Ton- 
nage Dues. 

Drawbacks  will  be  issued  for  Ships'  Stores  and  Bunker  Coal  when 
taken  on  board. 

Rule  III 

Except  at  the  requisition  of  the  Chinese  Government,  or  for  sale  to 
Chinese  duly  authorized  to  purchase  them,  Import  trade  is  prohibited 
in  all  Arms,  Ammunition,  and  Munitions  of  War  of  every  description. 
No  Permit  to  land  them  will  be  issued  until  the  Customs  have  proof 
that  the  necessary  authority  has  been  given  to  the  importer.  Infrac- 
tion of  this  rule  will  be  punishable  bv  confiscation  of  all  the  goods 
concerned.    The  import  of  Salt  is  absolutely  prohibited. 


RAILWAY  CONCESSIONS  IN  CHINA 


395 


i  i 


APPENDIX  V 

RAILWAY  CONCESSIONS   IN  CHINA  HELD  BT  FOREIGN  POWERS 

British 

1.  British  section  of  Hukuang  Railways,  Canton-Hankow,  250 
miles  uncompleted.  The  Hukang  Loan  under  which  this  conces- 
sion IS  held  IS  for  £6,000,000  to  £10,000,000,  bears  interest  at  5 

ir  1911     ^^^  '^^""^^  ^*  ^^'  ^^'  ^^^"^  '''''*''^^*  ^'  ^^^^^  ^^y 

2  Shasi-Hsingyi  Railway  System,  about  600  miles  in  length,  no 
work  done  The  loan  contract  embodying  this  concession  was 
dated  July  25,  1914,  was  for  £10,000,000  at  5  per  cent,  and  was 
signed  with  Messrs.  Pauling  &  Company. 

3.  Nanking-Hunan  Railway,  about  600  miles  from  Nankin?  to 
Pinghsiang  m  Hunan  with  an  additional  250  miles  of  branch  line 
from  Nanchang  to  Hangchow.    The  contract  granting  this  con- 

nnn  IZ  T^  ''^""^^  ''''  ^^""^^  ^^-  ^^^^^  «^"«  ^^^  ^  loan  of  £8,- 
000,000  at  5  per  cent,  including  an  advance  of  £500,000.  No  con- 
struction work  on  these  lines  has  been  done.  British-Chinese  Cor- 
poration  Loan. 

4.  Pukow-Singyang  Railway,  about  350  miles  in  length,  with 
an  option  for  further  extensions.  The  loan  contract  embodying 
this  concession  was  signed  on  November  14,  1913,  and  calls  for 
a  loan  of  £3  000,000  at  5  per  cent.  British-Chinese  Corpora- 
tion  Loan.    No  work  done. 

5.  Pinpang-Tsinan  Extension  of  the  Peking  Syndicate  Rail- 

r^  i^n'"''*!  ^^^  ^^^^  ^  ''°^^'  ^^^  ^  ^««tem  extension  of 
about  100  miles.    No  work  done. 

6.  Burma-Yunnan  Railway,  no  details  available. 

J*  ?f/^^^.^«8^-Canton  Railway,  with  extension  to  Swatow,  prob- 
ably  600  miles  m  all.  The  preferential  right  to  build  such  a  line 
was  granted  by  the  Chinese  Foreign  Office  in  a  note  to  the  British 
Legation  dated  August  25,  1914. 

French 

1.  Yunnanfu-Limchow  line,  about  700  miles  in  all,  and 

2.  Yunnan-Szechuan  line,  probably  600  to  700  miles  long.     The 


loan  contract  embodying  these  concessions  was  signed  with  the 
Banque  Industrielle  de  Chine  on  January  21, 1914,  and  calls  for  a 
loan  of  francs  600,000,000  at  5  per  cent.    No  work  done. 

3.  Chengtu-Tatung  line,  about  900  miles  long.  The  contract 
for  this  line  was  signed  with  the  Franco-Belgian  Group  in  July, 
1913.  No  definite  figure  for  the  loan  was  given,  but  the  contrac- 
tors estimate  that  it  would  cost  about  G.  $120,000,000.  No  con- 
struction work  done. 

4.  Lunghai  line,  about  500  miles  to  be  completed  on  the  western 
end  and  200  miles  on  the  eastern  end.  The  contract  for  this 
railway  was  signed  with  the  Franco-Belgian  Group  in  September, 
1912.  The  contractors  estimate  that  it  will  cost  about  francs 
600  000,000  to  complete  the  line.  The  central  section  of  about 
300  miles  is  complete  and  has  been  open  to  traffic  for  some  years. 

5.  Kweichow-Chengtu  line,  about  350  miles  in  length,  the 
French  section  of  the  Hukuang  Railways,  for  details  of  which  see 
British  section  above. 

German 

1.  Hankow-Ichang  section  of  the  Hukuang  Railways.  About 
300  miles  in  length,  with  a  branch  line  northward  which  if  ex- 
tended to  Honanfu  would  add  200  miles.  For  details  of  the 
Hukuang  loan  see  British  section  above.     Construction  work  in 

progress. 

Japanese 

1.  Kirin-Kaiyang  line,  about  300  miles. 

2.  Changchun-Taonan  line,  about  200  miles. 

3.  Taonan-Jehol  line,  about  500  miles. 

4.  Point  on  above  line  to  sea,  about  100  miles. 

5.  Tsinanfu-Shunteh  line   (extension  of  Shantung  Railway), 
about  150  miles. 

6.  Kaomi-Hsuchow  line,  about  200  miles. 

All  of  these  are  concessions  supposed  to  have  been  granted 
under  a  loan  made  in  September,  1918,  providing  for  a  loan  of 
yen  150,000,000,  of  which  yen  20,000,000  was  advanced.  The 
details  of  this  loan  have  not  been  made  public,  and  it  is  pos- 
sible that  it  may  have  been  for  a  larger  amount  and  that 
subsequent  advances  against  it  may  have  been  handed  to  the 
Chinese  Government.  No  work  has  been  done  on  any  of 
these  lines. 

7.  Kirin-Hweining  line,  about  277  miles  in  length.  A  contract 
for  the  construction  of  this  line  has  been  signed,  which  provided 


396 


TRADING  WITH  ASIA 


Ai 


m : 


for  an  advance  to  the  Chinese  Government  of  yen  10,000  000 
ihis  advance  was  made  and  is  believed  to  liave  been  spent'  for 
other  purposes.  It  is  estimated  that  the  line  wiU  cost  to  construct 
about  yen  10,000,000.  There  will  therefore  be  a  first  charge 
against  the  Ime  when  constructed  of  approximately  double  ita 
physical  value. 

8.  Nanchang-Foochow  line,  about  300  miles.  The  Japanese 
have  endeavored  to  secure  a  concession  of  this  line  but  have  met 
^th  a  protest  by  the  British  who  claim  that  it  is  in  violation  of 
the  concession  given  the  Pearsons  for  the  Nanchang- Canton  line 
mentioned  above. 

9  Kiukiang-Nanchang  Hne,  87  miles  in  length.  This  line  was 
built  by  Chmese  with  capital  borrowed  from  the  Taiwan  Bank 
amounting  to  yen  10,000,000,  bearing  interest  at  7  per  cent.  The' 
Chmese  having  defaulted  on  four  consecutive  interest  payments, 
under  the  terms  of  the  loan  the  Japanese  are  entitled  to  take  pos- 
session. In  order  to  prevent  this  an  endeavor  has  been  made  to 
negotiate  a  loan  with  the  Japanese  of  yen  60,000,000  for  the  na- 
tionalization of  this  line  and  the  construction  of  the  line  to  Foo- 
cnow  mentioned  above. 

Russian 

1.  Tsitsihar-Aigun  line,  about  400  miles,  no  details  available. 

2.  Mogan-Harbin  line,  about  300  miles,  no  details  available. 

3.  Mongolian  Railways.  The  Russians  have  preferential  rights 
for  the  construction  of  railways  in  Outer  Mongolia.  It  i»  not 
beheved  that  any  detailed  construction  contracts  exist. 

American 

1.  Chinchow-Aigun  line,  about  1,000  miles.  Concession  for  this 
line  was  granted,  but  owing  to  Russian  and  Japanese  protests,  no 
work  thereunder  has  been  attempted. 

2.  Suiyuan-Lanchow  line,  about  600  miles. 

3.  Hangchow-Wenchow  line,  about  150  miles. 

4.  Chuchow  (Hunan)— Pakhoi,  about  600  miles. 

5.  Hainan  Island,  about  175  miles. 

6.  Smyang-Chengtu  line,  about  650  miles. 

The  above  lines  are  routes  tentatively  selected  under  the 
Siems-Carey  contract  which  provides  for  the  construction  of 
3,000  miles  of  railway.    No  construction  work  has  been  done. 

7.  Ichang-Kweichow  line,  about  200  miles,  being  the  American 
section  of  the  Hukuang  Railways,  for  details  of  which  see  British 
section  above.    Construction  work  is  in  progress. 


APPENDIX  VI 

principal  undeveloped  industrlil  concessions  in  china 
other  than  railways  held  by  foreign  interests 

British 

1.  Szechuan  Mining  Concession,  granted  to  Pritchard  Morgan 
about  1898,  in  connection  with  which  a  certain  amount  of  pros- 
pecting work  was  done  in  1900.  No  field  work  has  been  done 
since  1900,  and  it  is  piobable  that  the  concession  has  lapsed,  al- 
though preferential  rights  might  be  claimed  under  it. 

French 

1.  Pugow  Development  Loan,  of  francs  150,000,000,  concluded 
with  the  Banque  Industrielle  de  Chine,  carrying  interest  at  5  per 
cent,  secured  on  the  public  works  to  be  carried  out  thereunder,  on 
the  Peking  municipal  taxes,  and  on  the  wine  and  tobacco  tax 
north  of  the  Yangtze.  The  loan  was  stated  to  be  for  the  develop- 
ment of  the  Port  of  Pukow  and  for  the  construction  of  various 
public  works  in  Peking.  The  loan  was  floated,  but  only  a  small 
portion  of  the  proceeds  were  turned  over  to  the  Chinese 
Government. 

Japanese 

1.  Hunan  Mining  Loan,  nominal  amount  yen  5,000,000  of  which 
only  about  Mex.  $100,000  was  paid  over.  This  loan  was  nego- 
tiated by  the  Provincial  Governor  of  Hunan  with  the  Taiwan 
Bank  and  was  secured  on  the  Shuikoshan  antimony  mines.  Great 
objection  to  the  loan  was  displayed  by  the  natives  of  Hunan, 
and  it  is  probable  that  the  advance  will  be  repaid  and  the  loan 
cancelled. 

2.  Fukien  Mining  Loan.  There  are  no  authentic  details  known 
in  connection  with  this  loan.  It  is  believed  to  be  for  yen  5,000,000 
and  to  have  been  secured  on  mining  rights  in  Fukien.  The  Pro- 
vincial Assembly  protested  the  loan  and  unless  the  Central  Gov- 
ernment has  formally  sanctioned  it,  its  validity  must  be  consid- 
ered doubtful. 

197 


398 


TRADING  WITH  ASIA 


i  i 


f1 


li 


3.  Fenghuangshan  Mining  Loan.  A  concession  for  the  working 
of  the  Fonghuangshan  iron  deposits  was  granted  to  a  Chinese 
company  prior  to  1911.  During  the  revolutionary  disturbances  of 
that  year  the  company  appears  to  have  sold  its  rights  to  a  Jap- 
anese group  for  Mex.  $1,000,000.  On  discovery  of  this  the  Gov- 
ernment cancelled  the  concession  and  refused  to  recognize  any  for- 
eign interest.  It  is  understood  that  in  December,  1918,  an  effort 
was  made  to  form  a  joint  Sino-Japanese  Company  to  repay  the 
advance  made  and  take  over  the  concession.  Japan  is  to  have 
preferential  rights  in  regard  to  the  purchase  of  ore  not  required 
by  the  company. 

4.  Arms  Loan  and  Iron  Industry  Loan.  No  authentic  details 
are  available  in  respect  of  either  of  these  loans.  It  is  believed  that 
the  former  was  for  a  considerable  sum  which  was  spent  for  mili- 
tary purposes  and  that  the  loan  carried  with  it  preferential  rights 
in  regard  to  the  supply  of  arms  and  equipments  to  the  Chinese 
army.  The  amount  of  the  second  is  not  known  but  is  said  to  be 
"staggering."  Presumably  it  carries  with  it  the  control  of  Chi- 
nese ore  deposits  and  an  agreement  to  supply  to  Japan  a  large 
percentage  of  the  iron  produced.  Both  of  the«e  loans  are  sup- 
posed to  have  been  concluded  by  military  officers  acting  osten- 
sibly in  the  interests  of  national  defense.  They  were  negotiated 
during  the  autumn  of  1918. 

5.  Communications  Bank  Loan.  Two  loans,  one  of  yen  5,000,- 
000  and  the  other  of  yen  20,000,000,  were  negotiated  between  this 
bank  and  the  Japanes  Industrial-Chosen-T^iwan  Bank  Group. 
They  carry  with  them  the  option  of  making  further  loans  to  this 
Bank. 

6.  Bureau  of  Printing  and  Engraving  Loan  of  yen  2,000,000 
was  negotiated  in  January,  1918,  with  Mitsui  &  Company, 
and  carries  with  it  preferential  rights  for  the  supply  of  mate- 
rials. 

7.  Kirin  Forestry  Lcran,  signed  between  the  Chinese  Govern- 
ment and  the  Japanese  Industrial-Chosen-Taiwan  Group  (acting 
through  the  Sino-Japanese  Exchange  Bank)  for  yen  30,000,000  at 
7l^  per  cent  secured  on  the  forests  and  gold  mines  of  the  prov- 
inces of  Kirin  and  Heilungkiang,  and  carrying  with  it  the  right 
to  undertake  conjointly  with  the  Chinese  Government  the  exploita^ 
tion  of  the  securities  mentioned. 

8.  Telephone  Loan,  of  yen  10,000,000,  of  which  yen  3,000,000 
was  in  repayment  of  an  earlier  loan.  This  loan  is  secured  on 
the  national  telephone  system  and  carries  with  it  preferential 


INDUSTRIAL  CONCESSIONS  IN  CHINA         399 

rights  in  regard  to  the  appointment  of  advisers  and  probably  in 
r^ard  to  the  supply  of  materials.    The  authentic  text  is  not 

9   Wireless  Loan.    In  November,  1917,  a  Danish  firm  (S.  Lar- 
sen  &  Co  )  concluded  a  contract  with  the  Ministry  of  the  Navy 
for  the  erection  of  a  wireless  plant  at  a  cost  of  about  £530,000. 
This  contract  was  subsequently  transferred  to  Japanese  interests. 
Subsequently,  during  the  autumn  of  1918,  these  Japanese  interests 
were  supposed  to  have  concluded  a  secret  wireless  loan,  the  de- 
tails of  which  are  not  known,  carrying  with  it  a  monopolistic  con- 
cession for  a  commercial  wireless  service  to  Japan  and  America, 
and  preferential  rights  for  the  supply  of  wireless  materials.     So 
far  as  the  latter  condition  is  concerned,  the  recent  British  Marconi 
contract  appears  to  have  rendered  it  null  and  void.     It  is  re- 
ported that  the  Japanese  holders  of  this  concession   have  re- 
cently endeavored  to  secure  the  representation  of  certain  Amer- 
ican manufacturers  of  wireless  apparatus. 

Americak 

1.  Grand  Canal  Conservancy  Loan  of  G.  $6,000,000,  of  which 
$3,500,000  was  taken  up  by  American  interests,  and  $2,500,000  by 
Japanese.  The  loan  has  not  yet  received  the  formal  parliamen- 
tary ratification  provided  for  in  the  contract,  but  an  advance  of 
$250,000  has  been  made  to  meet  the  expense  of  preliminary  sur- 
veying work. 

2.  Wine  and  Tobacco  Tax  Loan,  of  G.  $5,000,000  was  negoti- 
ated with  the  Continental  and  Commercial  Bank  in  the  Spring  of 
1917,  secured  on  the  above  tax,  and  carrying  with  it  the  option 
of  further  loans  against  the  same  security  up  to  G.  $25,000,000. 

3.  Chinese  National  Iron  Industry.  In  the  spring  of  1917  cer- 
tain American  interests  (Orient  Mines  Company)  undertook  the 
investigation  of  China's  iron  resources  at  the  request  of  the  Chi- 
nese Government  with  a  view  to  the  submission  of  a  scheme  for 
the  development  of  a  Chinese  national  iron  industry  financed  by 
American  capital.  While  it  does  not  appear  that  any  contracts 
have  been  executed,  the  whole  circumstances  of  the  matter  are 
such  as  to  give  the  United  States  a  preferential  interest  in  this 
matter. 

Germak 
1.  Shantung  Mining  Rights.    The  German-Chinese  Treaty  of 
1898  and  the  supplemental  Shantung  Railway  contract  granted  to 


ir   ' 


400 


;l  ! 


TRADING  WITH  ASIA 


German  interests  the  right  of  developing  minine  DrouertiM  Jn 
Shantung  wthm  thirty  miles  of  the'^railroad.  V^"^^"  " 
this,  Article  IV  of  the  Treaty  grants  preferential  rights  for  ^ 
manner  of  public  works.  There  has  recently  com"  to  £t  . 
further  agreement  between  China  end  Germany  whereby  f™ 
Z^d  r  the-Ploitation  of  mines  in  certaL  sSed  ai^" 
«  be  substituted  for  the  general  righte  mentioned  in  the 

Iktbbnational 

1.  The  Consortium  (now  consisting  of  the  British,  French  and 
^iT:tt:r^  hoMs  the  option  for  a  currency' refoli::^ 
™  f  u  '^••e«"»^afon  loans.    The  United  States  Gov- 

ernment, however,  claims  an  individual  and  national  interest  in 


APPENDIX  VII 


chinese  national  debt 

Generaij  Statement,  February,  1919 

Long-term  foreign  debts $1,145,550,000 

Short-term  foreign  debts 67,920,345 

Long-term  domestic  loans 221,523,095 

Short-term  domestic  debts 14,5&4,514 

Total,  February,  1919 $1,449,577,954 


Additions 

Chicago     (Continental    and     Commercial 

Bank)    $ 

Pacific  Company  Tobacco  Loan 

8th  Year  domestic  loan 

Yokohama  Specie  Bank  Advance 


5,500,000 

5,500,000 

56,000,000 

9,000,000 


Total,  March,  1920 $1,525,577,954 

Total  of  Foreign  Shobt-tebm  Debts  as  of  Febbuaby  28,    1919 


Kungfs.  Taels  . 
Sh.  Taels   


739,500. 

427,316.19 

$   2,639,034.09 

£ 824,967.  28  2d 

Yen    41,423,676.24 


Francs   22,594,348.75 

Gold  $ 280,000. 

Tientsin  Taels  . . .    2,656,236.46 
Chuan  Taela 28,615.15 


(i  I  : 


401 


I,  I! 


ill 


402  TRADING  WITH  ASIA 

Foreign  Long-Tebm  Debts  as  op  Febbuaby  28,  1919 


Name  of  Debt 


1895  4%  Gold 
Loan 

1896  5%  Gold 
Loan 

1898  4%%  Gold 
Loan 

Crisp  Loan 

Reorganisation 
Loan 

Anglo-Chinese 
Loan 

Industrial  Loan. 
Chin-yu  Adrance. 

Ko-ah  Loan, 
Chicago  Bank 
Loan 

Supplementary 

Keorganisation 

Loan, 

Ist  Advance 
Supplementary 

Beorganisation 

Loan, 

2d  Advance 

Supplementary 
Beorganisation 
Loan, 
3d  Advance 

Gold  Mine  and 
Forest  Loan 

Participation 
Loan 

Boxer  Indemnity. 
Total 


Borrowing  Date 


Aug.  6,  1895 
March  23,  1896 
March  1,  1898 
Aug.  30,  1912 

April  26,  1913 
Feb.  14,  1914 
Oct.  9,  1913 

May  16,  1914 


Sept.  9,  1016 
Nov.  10,  1916 

Sept.  1,  1917 


Jan.  6,  1918 

July  10,  1918 

Aug.  1,  1918 
Sept.  20,  1918 
Oct.  27,  1900 


Amount 


Creditor 


Fr.    400,000,000 

£       16,000,000 

£      16,000,000 

£      10,000,000 
(only  £5,000,000 
paid) 

£      25,000,000 
£  375,000 

Fr.    150,000,000 
(only   Fr.    100,- 

000,000  paid) 
Fr.    100,000,000 
(only    Fr.    32, 

115,500  paid) 

Yen      5,000,000 
G.$       5,000,000 

Yen     10,000,000 


Yen     10,000,000 

Yen     10,000,000 

Yen  30,000.000 
Yen  20,000.000 
HK.$355,925.565 


I^.  30,958,068.91 
G.$  5,000,0(»0.00 
Yen  80,000,000.00 
Fr.  317,666,909.00 
f  51,646,622.00 
HK.$323,07 1,052.56 


Russo-French 
Syndicate 

Anglo-German 
Syndicate 

Anglo-German 
Syndicate 

C.   Birch  Crisp 
&  Co.,  London 

Five  Nation 
Bank  Groups 

Anglo-Chinese 
Corporation 

Hanque  Indus- 
trielle  de  Chine 

Ranque  Indua- 
trielle  de  Chine 

Ko-ah  Co. 
Chicago  Bank 

Yokohama 
Specie  Bank 


Yokohama 
Specie  Bank 


Yokohama 
Specie  Bank 


Japanese  Bank 
Group 

Japanese  Bank 
Group 

11  nations 


CHINESE  NATIONAL  DEBT 


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APPENDIX  VIII 

extracts  from  the  japanese  commercial  code 
The  Application  of  Law 


In  case  there  is  no  provision  in  this  Code  as  to  a  commercial 
matter,  the  customary  commercial  law  shall  apply,  or  if  there  is 
no  such  customary  law,  the  Civil  Code  shall  apply. 

2 

The  provisions  of  this  Code  apply  to  commercial  transactions  of 
public  juridical  persons  only  if  not  otherwise  provided  by  law  or 
regulation. 

3 

If  a  transaction  is  a  commercial  one  with  regard  to  one  party 
thereto,  the  provisions  of  this  Code  apply  to  all  parties. 

Traders 

4 

A  trader  in  the  sense  of  this  Code  is  a  person  who  in  his  own 
name  carries  on  commercial  transactions  as  a  business. 

5 
When  a  minor  or  a  married  woman  carries  on  a  commercial 
business,  registration  must  be  made. 

6 
A  minor  or  a  married  woman,  who  has  been  permitted  to  be- 
come a  partner  with  unlimited  liability  of  a  company,  is  treated 
as  a  person  of  full  capacity  as  to  the  business  of  such  company. 

7 
When  a  guardian  carries  on  a  commercial  business  for  his  ward, 
registration  must  be  made. 

A  restriction  on  the  right  of  representation  of  the  guardian  can- 
not be  set  up  against  third  persons  acting  in  good  faith. 

8 
The  provisions  relating  to  commercial  registration,  trade  names 

409 


I     ,' 


, 


410 


TRADING  WITH  ASIA 


and  trade  books  do  not  apply  to  persons  who  buy  and  sell  things 
as  pedlars  or  on  the  streets  or  to  other  petty  traders. 

Commercial  Registration 

9 

Facts  required  to  be  registered  according  to  the  provisions  of 
this  Code  are  registered  on  the  application  of  the  person  con- 
cerned in  the  Commercial  Register  kept  by  the  court  of  his  seat  of 
business. 

10 
Facts  required  to  be  registered  at  the  place  of  a  principal  ofl&ce 
must  also  be  registered  at  the  place  of  every  branch  office,  ezcepjt 
as  otherwise  provided  by  this  Code. 

11 
Facts  entered  in  the  Commercial  Register  must  without  delay 
be  published  by  the  Court. 

12 
A  fact  to  be  registerfed  cannot  be  set  up  against  third  persons 
acting  in  good  faith,  until  after  it  has  been  registered  and  pub- 
lished; and  not  even  then  against  third  persons  who  for  a  just 
cause  were  ignorant  of  such  fact. 

13 
When  a  fact  to  be  registered  at  the  place  of  a  branch  ofl&ce  has 
not  been  registered,  the  provisions  of  the  preceding  article  apply 
only  to  business  transacted  at  such  branch  office. 

14 
A  registration  may  be  set  up  against  third  persons,  even  though 
it  differs  from  the  publication. 

15 
If  any  alteration  takes  place  in  a  fact  registered,  or  if  such 
fact  ceases  to  exist,  such  alteration  or  cessation  must  without  delay 
be  registered  by  the  persons  concerned. 

Trade  Names 

16 
A  trader  may  use  his  family  name  or  his  full  name  or  any  other 
denomination  as  his  trade  name. 

17 
In  the  trade  name  of  a  company  the  word  gomeikwaisha  or 
goshiwaisha  or  kabushikikwaisha  or  kahushikigoshikwaisha  must 
be  used  according  to  the  nature  of  the  company. 


JAPANESE  COMMERCIAL  CODE 


411 


18 


Where  no  company  exists,  no  word  indicating  the  existence  of 
a  company  must  be  used  in  the  trade  name.  This  applies  also 
when  the  business  of  a  company  is  taken  over  by  another  person. 

A  person  who  acts  in  contravention  of  the  provisions  of  the 
foregoing  paragraph  is  Uable  to  a  fine  of  from  five  yen  to  fifty 

^^"  19 

A  trade  name  which  is  already  registered  for  another  person 
cannot  be  registered  in  the  same  city,  town  or  village  for  the  same 

business. 

20 

A  person  who  has  his  trade  name  registered  may  demand 
against  any  one  using  the  same  or  a  similar  trade  name  for  the 
purpose  of  improper  competition,  that  he  discontinue  such  use; 
but  this  does  not  affect  any  claim  for  damages. 

A  person  who  uses  the  registered  trade  name  of  another  in  the 
same  city,  town  or  village  for  the  same  business  is  presumed  to  do 
so  for  the  purpose  of  improper  competition. 

21 

The  assignment  of  a  trade  name  can  be  set  up  against  third 
persons  only  if  it  is  registered. 

22 

When  a  person  has  assigned  his  business  together  with  the  trade 
name,  he  is,  unless  the  parties  concerned  have  expressed  a  differ- 
ent intention,  not  allowed  for  a  period  of  twenty  years  to  carry  on 
the  same  business  in  the  same  city,  town  or  village. 

If  the  person  assigning  expressly  contracts  not  to  carry  on  the 
same  business,  such  contract  has  effect  only  for  the  same  Fu  or 
Ken  1  and  only  for  a  period  not  exceeding  thirty  years. 

The  person  assigning  is  irrespective  of  the  provisions  of  the 
preceding  two  paragraphs  not  allowed  to  carry  on  the  same  busi- 
ness for  the  purpose  of  improper  competition. 

23 

The  provisions  of  the  preceding  article  apply  correspondingly 
where  the  business  alone  is  assigned. 

24 

When  a  person  for  whom  a  trade  name  is  registered  has  given 

1  Ken,  corresponds  most  nearly  to  an  English  "county."  Fu  is  a 
city  excluded  from  the  ken,  in  which  the  city  government  performs 
the  functions  of  a  ken  government.  There  are  only  three  fu,  namely, 
Tokyo,  Kyoto  and  Osaka. 


4\ 


(      !f 


vl\ 


412 


TRADING  WITH  ASIA 


up  such  trade  name  or  has  changed  it  without  having  registered 
such  fact,  any  party  interested  may  apply  to  the  court  for  the 
cancellation  of  such  registration. 

In  such  case  the  court  must  summon  the  person  for  whom  the 
registration  was  made  to  present  his  objections  within  a  reason- 
able time  to  be  fixed  by  the  court.  If  no  objection  is  made  within 
such  time,  the  registration  must  be  forthwith  cancelled  by  the 
court. 

Trade  Books 

25 
A  trader  must  keep  books  and  record  therein  accurately  and 
clearly  his  daily  dealings  and  all  circumstances  affecting  his  prop- 
erty.   As  to  household  expenses  only  the  total  monthly  amount 
need  be  entered. 

As  to  the  dealings  of  a  retail  business,  only  the  total  amount  of 
each  day's  sales  may  be  entered,  separating  cash  sales  and  credit 
sales. 

26 

At  the  time  when  a  trader  commences  business,  or  when  the  for- 
mation of  a  company  is  registered,  and  once  in  each  year  at  a 
fixed  time,  a  general  inventory  of  movables  and  immovables,  of 
credits  and  debts  and  of  other  property  as  well  as  a  balance-sheet 
must  be  made  and  entered  in  a  book  specially  kept  for  such 
purpose. 

In  the  inventory  a  valuation  must  be  inserted  of  the  movables 
and  immovables  and  of  the  credits  and  other  property  as  at  the 
time  of  making  the  inventory. 

27 

If  a  company  distributes  profits  twice  a  year  or  oftener,  it  must 
make  an  inventory  and  balance-sheet  according  to  the  provisions 
of  the  preceding  article  at  the  time  of  each  distribution. 

28 

A  trader  must  preserve  his  trade  books  and  business  corre- 
spondence for  a  period  of  ten  years. 

Such  period  is  to  be  computed  for  a  trade  book  from  the  time 
when  it  is  closed. 

Trade  Assistants 

29 
A  trader  may  appoint  a  procurator  to  carry  on  his  business 
either  at  the  principal  office  or  at  a  branch  office. 


JAPANESE  COMMERCIAL  CODE 


30 


413 


A  procurator  is  authorized  to  do  in  the  place  of  the  principal 
all  transactions  in  or  out  of  court  relating  to  the   principaPs 

business. 
A  procurator  may  appoint  and  dismiss  hanto,^  clerks  and  other 

assistants. 

Any  limitation  of  the  power  of  representation  of  a  procurator 
cannot  be  set  up  against  third  persons  acting  in  good  faith. 

31 

The  principal  must  register  the  appointment  of  a  procurator 
and  the  termination  of  his  power  of  representation  at  the  place 
of  the  principal  office  or  the  branch  office  for  which  he  is 
appointed. 

32 

Without  the  permission  of  the  principal  a  procurator  is  not 
allowed  to  do  commercial  transactions  on  his  own  account  or  on 
that  of  a  third  person,  or  to  become  a  partner  with  unlimited 
liability  of  a  company. 

If  a  procurator  in  violation  of  the  foregoing  provisions  under- 
takes a  commercial  transaction  on  his  own  account,  the  principal 
may  consider  such  transaction  as  done  on  his  account. 

This  right  of  the  principal  ceases,  if  it  is  not  exercised  for  two 
weeks  from  the  time  when  the  principal  receives  notice  of  such 
transaction,  or  if  a  year  has  elapsed  since  the  time  of  the  trans- 
action. 

33 

A  trader  may  appoint  a  hanto  or  a  clerk  for  particular  parts 
of,  or  for  specially  fixed  matters  relating  to  his  business. 

A  hanto  or  a  clerk  is  authorized  to  do  all  acts  relating  to  the 
matters  entrusted  to  him. 

34 

Assistants  other  than  procurators,  hanto  or  clerks  are  pre- 
sumed not  to  be  authorized  to  do  juristic  acts  in  the  place  of  the 
principal. 

35 

By  the  provisions  of  this  chapter  the  application  of  the  provi- 
sions of  the  Civil  Code  as  to  the  relations  arising  from  the  hiring 
between  the  principal  and  trade  assistants  is  not  affected. 

2  The  word  hanto  is  generally  used  in  the  former  treaty  ports  of 
Japan,  and  denotes  what  in  German  would  be  called  *'Handlung8- 
hevollmachtigter." 


i 


414  TRADING  WITH  ASIA 


Commercial  Agents 

36 
A  commercial  agent  ^  is  a  person  who,  without  being  an  assist- 
ant, habituaUy  acts  on  behalf  of  a  particular  trader  as  his  repre- 
sentative or  intermediary  in  commercial  transactions  belonging  to 
the  branch  of  business  of  such  trader. 

37 
When  a  commercial  agent  has  acted  as  representative  or  inter- 
mediary in  a  commercial  transaction,  he  must  without  delay  give 
notice  thereof  to  the  principal. 

38 
Without  the  permission  of  the  principal,  a  commercial  agent 
is  not  allowed  to  do  on  his  own  account  or  on  that  of  a  third 
person  commercial  transactions  falling  within  the  kind  of  business 
carried  on  by  the  principal,  or  to  become  a  partner  with  unlim- 
ited liability  of  a  company  whose  object  is  the  same  kind  of  busi- 
ness. 

If  a  commercial  agent  acts  in  contravention  of  these  provi- 
sions the  provisions  of  Art.  32,  2  and  3  apply  correspond- 
ingly. 

39 
When  a  commercial  agent  has  been  entrusted  with  the  sale  of 
goods,  he  is  entitled  to  receive  any  notice  relating  to  a  defect  in 
the  goods  sold  or  a  deficiency  in  their  quantity  and  to  the  per- 
formance of  the  sale. 

40 

When  the  time  of  duration  of  the  contract  has  not  been  fixed 
by  the  parties,  it  may  be  terminated  by  eitlier  party  on  a  two 
months'  notice. 

Irrespective  of  whether  a  time  of  duration  has  been  fixed  or 
not,  the  contract  may  be  terminated  at  any  time  by  either  party, 
if  an  unavoidable  necessity  exists  for  doing  so. 

41 
Unless  a  different  intention  has  been  expressed,  a  commercial 
agent  ha.s  a  right  of  retention  against  all  property  whose  posses- 
sion he  holds  on  account  of  the  principal,  for  all  obligations 
arising  in  his  favour  from  his  acting  as  representative  or  as  inter- 
mediary in  commercial  transactions. 


3  In  the  English  Law  the  word  "agent"  has  a  much  wider  mennina. 


JAPANESE  COMMERCIAL  CODE  415 


PARTNERSHIPi 
62 

Partners  who  are  to  represent  the  partnership  are  authorized 
to  do  all  acts  in  or  out  of  court  relating  to  the  business  of  the 

partnership.  «.  .,  ^   , 

The  provisions  of  Arts.  44,  1  and  54  of  the  Civil  Code  apply 

correspondingly  to  ordinary  partnerships. 

Stock 

147 

Certificates  of  shares  cannot  be  issued  before  registration 
according  to  the  provisions  of  Art.  141,  1  has  been  made  at  the 
place  of  the  principal  office. 

Certificates  issued  in  contravention  of  this  provision  are  in- 
valid; but  this  does  not  affect  the  right  to  claim  damages  against 
the  persons  who  have  issued  such  certificates. 

149 

Unless  it  is  otherwise  provided  by  the  company  contract,  a 
share  may  be  assigned  to  another  person  without  the  assent  of  the 
company.  Such  assignment  or  a  previous  promise  of  assignment, 
however,  cannot  be  made  until  registration  according  to  the  pro- 
visions of  Art.  141,  1  is  made  at  the  place  of  the  principal  office. 

150 

The  assignment  of  a  name-share  cannot  be  set  up  against  the 
company  or  any  other  third  person,  unless  the  name  and  domicile 
of  the  assignee  is  entered  in  the  list  of  shareholders  and  his  name 
inserted  in  the  certificate. 

155 

When  the  whole  amount  of  the  share  has  been  paid  up,  a 
shareholder  may  require  his  certificate  to  be  made  out  to  bearer. 

Debentures 

206 
The  assignment  of  a  name-debenture  cannot  be  set  up  against 
the  company  or  against  any  other  third  person,  unless  the  name 
and  domicile  of  the  assignee  have  been  entered  in  the  debenture 
list  and  his  name  inserted  in  the  debenture. 

207 
The  provisions  of  Art.  155  apply  correspondingly  to  debentures. 


416 


TRADING  WITH  ASIA 


JAPANESE  COMMERCIAL  CODE 


417 


Capital  Issues 

217 

The  company  must  register  the  following  particulars  at  the 
place  of  the  principal  office  and  of  each  branch  office  within  two 
weeks  from  the  day  of  the  ending  of  the  general  meeting  of 
shareholders  convened  in  accordance  with  the  provisions  of  Art. 
213,  namely : — 

1.  The  whole  amount  of  the  capital  increased; 

2.  The  date  of  the  resolution  to  increase  the  capital; 

3.  The  amount  paid  in  upon  each  new  share; 

4.  If  preference  shares  have  been  issued,  the  rights  of  their 
holders. 

Until  registration  in  accordance  with  the  foregoing  provisions 
has  been  made  at  the  place  of  the  principal  office,  no  certificate 
for  the  new  shares  may  be  issued,  and  no  assignment  of  them  nor 
a  previous  promise  of  assignment  may  be  made. 

Foreign  Companies 

255 

A  foreign  company  which  sets  up  a  branch  office  in  Japan 
must  make  the  same  registrations  and  public  notifications  as  com- 
panies of  the  same  kind  or  of  the  kind  most  resembling  it,  existing 
in  Japan. 

In  addition  a  foreign  company  which  sets  up  a  branch  office 
in  Japan  must  appoint  a  representative  residing  in  Japan,  and 
must  register  his  name  and  domicile  at  the  same  time  with  the 
registration  of  the  branch  office. 

The  provisions  of  Art.  62  apply  correspondingly  to  a  represent- 
ative of  a  foreign  company. 

256 

If  particulars  which  are  to  be  registered  according  to  the  pro- 
visions of  Art.  255,  1  and  2  happen  in  a  foreign  country,  the 
period  for  their  registration  is  computed  from  the  time  when 
notice  thereof  arrives. 

257 

When  a  foreign  company  first  sets  up  a  branch  office  in  Japan, 
other  persons  may  disregard  the  existence  of  the  company,  until 
it  has  been  registered  at  the  place  of  such  branch  office. 

258 

A  company  which  sets  up  its  principal  office  in  Japan  or  which 
makes  it  its  principal  object  to  carry  on  business  in  Japan,  must, 


even  though  it  is  formed  in  a  foreign  country,  comply  with  the 
same  provisions  as  a  company  formed  in  Japan. 

The  provisions  of  Arts.  147,  149,  150,  155,  1,  206,  207  and  217, 
2  apply  correspondingly  to  the  issue  of  shares  and  to  the  assign- 
ment of  shares  or  debentures  of  a  foreign  company  in  Japan.  In 
that  case  such  branch  office  as  is  first  set  up  in  Japan  is  deemed 
to  be  the  principal  office. 

260 

When  a  representative  of  a  foreign  company  which  has  set 
up  a  branch  office  in  Japan  commits  as  to  the  affairs  of  such 
company  an  act  contrary  to  the  public  welfare  or  to  good  morals, 
the  court  may  upon  application  of  the  public  procurator  or  of 
its  own  motion  order  such  branch  office  to  be  closed. 

Extract  prom  a  Legal  Opinion  by  a  Foreign  Attorney 

IN  Japan 

A  foreign  corporation  establishing  a  branch  here  must  pay  the 
same  taxes  as  a  Japanese  corporation—that  is,  a  business  tax  and 
an  income  tax  on  the  profits.  Such  taxes  are  only  on  the  business 
done  in  Japan  and  the  profits  earned  here.  There  are  no  taxes 
on  the  capital  of  the  corporation  and  the  business  done  elsewhere. 
The  corporation  can,  of  course,  sue  and  be  sued  in  its  own  name, 
and  enter  into  contracts  in  its  own  name,  and  has  practically  the 
same  powers  as  a  domestic  corporation.  The  registration  of  a 
branch  is  comparatively  simple,  except  in  the  case  of  banking 
and  insurance  companies,  when  it  is  extremely  difficult. 

As  to  the  advisability  of  incorporation  under  the  laws  of  Japan, 
from  what  has  been  said  it  will  be  seen  that  a  domestic  corpora- 
tion does  have  some  advantages  which  a  foreign  corporation  does 
not,  but  in  respect  to  the  ownership  of  ships,  even  a  Japanese 
corporation  the  majority  of  shareholders  of  which  are  foreigners, 
cannot  own  ships  registered  under  Japanese  law.  In  the  matter 
of  taxation  they  stand  on  an  equal  footing,  except  that,  of  course, 
a  foreign  corporation  paying  the  tax  in  Japan  might  also  find 
that  it  had  to  pay  a  tax  on  these  profits  in  the  country  where  it 
was  incorporated,  thus  being  subject  to  a  double  taxation.  If  it 
was  incorporated  under  the  taws  of  Japan,  this  might  be  avoided. 

There  is  one  practical  disadvantage  of  the  Japanese  corpora- 
tion composed  of  foreigners,  and  that  is  that  while  it  is  legally  a 
Japanese  juridical  person  and  must  look  to  Japan  for  the  protec- 
tion of  its  interests  abroad,  say,  for  instance,  in  Russia,  and  while 


\ 


418 


TRADING  WITH  ASIA 


i  I. 


this  protection  will  be  given,  it  will  not  be  given  with  the  same 
enthusiasm  as  in  the  case  where  the  shareholders  are  Japanese. 
In  other  words,  such  a  corporation  is  similar  to  a  half-caste  and 
is  regarded  in  very  much  the  same  way. 

The  necessary  documents  to  be  supplied  by  any  corporation 
desiring  to  register  a  branch  in  Japan  are  as  follows: — (1)  Certi- 
fied copy  of  the  certificate  of  incorporation;  (2)  certified  copy  of 
the  resolution  of  the  board  of  directors  authorising  the  establish- 
ment of  a  branch  and  the  ajjpointment  of  a  representative;  (3) 
affidavit  containing  certain  information;  (4)  power  of  attorney 
authorizing  registration;  (5)  general  power  of  attorney  conferring 
powers  on  the  representative. 

All  these  papers  must  bear  the  certificate  of  the  Japanese 
Consulate  to  the  effect  that  the  notary  or  other  official  before 
whom  the  acknowledgment  is  made  is  a  properly  authorised 
notary. 


APPENDIX  IX 


THE    INDIAN    MERCHANDISE    MARKS    MANUAL 

Introductory  Note 

The  manual  is  in  the  following  parts: 

I.  Extracts  from  the  Indian  Merchandise  Marks  Act,  and  con- 
nected Acts. 
II.  Notifications  under  the  same. 

III.  General  Instructions.  . 

In  the   Instructions  the   following  classification  of   goods  is 

adopted:  „  .         ,  ,  i.u 

A.  Goods  having  applied  to  them  counterfeit  trade  marks  or  other 

indications  that  they  are  the  manufacture  or  merchandise 
of  a  person  whose  manufacture  or  merchandise  they  are 

not. 

B.  Goods  having  applied  to  them  false  trade  descnptions  or  other 

indications  in  respect  of  the  country  in  which  they  were 
made  or  produced. 

C.  Goods  having  applied  to  them  false  trade  descriptions  that  are 

false  in  other  respects. 

D.  Piece-goods  which  have  not  the  length  properly  stamped  on 

each  piece. 
Class  B  is  further  subdivided  into: 

(a)  Goods  made  or  produced  in  a  foreign  country,  that  is,  beyond 
the  limits  of  the  United  Kingdom  and  British  India,  and 
bearing  or  purporting  to  bear  the  name  or  trade  mark  of 
any  person  who  is  a  manufacturer,  dealer  or  trader  in 
British  India  or  the  United  Kingdom. 

(h)  Goods  made  or  produced  beyond  the  limits  of  the  United 
Kingdom  or  British  India,  to  which  is  applied  a  false 
trade  description  or  indication  (other  than  the  name  or 
trade  mark  of  a  manufacturer,  dealer  or  trader  in  the 
United  Kingdom  or  British  India)  indicating  that  they 
were  made  or  produced  in  the  United  Kingdom  or  British 

India. 

419 


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TRADING  WITH  ASIA 


!    ■■' 


I  '  !';     J 


I  I 


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(c)  Goods  made  or  produced  in  one  foreign  ootintry  but  bearing 
a  false  trade  description  indicating  that  they  were  made 
or  produced  in  another. 
Part  I. — Principal  Provisions  of  the  Indian  Merchandise 
Marks  Act,  1889,  and  Connected  Acts  Relating  to  Mer- 
chandise Marks. 

Sea  Customs  Act,  1878,  section  18. — No  goods  specified  in  the 
following  clauses  shall  be  brought,  whether  by  land  or  sea,  into 
British  India: 

(d)  Goods  having  applied  thereto  a  counterfeit  trade  mark 
within  the  meaning  of  the  Indian  Penal  Code,  or  a  false  trade 
description  within  the  meaning  of  the  Indian  Merchandise  Marks 
Act,  1889. 

(e)  Goods  made  or  produced  beyond  the  limits  of  the  United 
Kingdom  and  British  India,  and  having  applied  thereto  any  name 
or  trade  mark  being,  or  purporting  to  be,  the  name  or  trade  mark 
of  any  person  who  is  a  manufacturer,  dealer  or  trader  in  the 
United  Kingdom  or  in  Britisli  India,  unless 

(1)  the  name  or  trade  mark  is,  as  to  every  application  thereof, 
accompanied  by  a  definite  indication  of  the  goods  having 
been  made  or  produced  in  a  place  beyond  the  limits  of  the 
United  Kingdom  and  British  India,  and 

(2)  the  country  in  which  that  place  is  situated  is  in  that  indica- 
tion indicated  in  letters  as  large  and  conspicuous  as  any 
letter  in  the  name  or  trade  mark,  and  in  the  same  language 
and  character  as  the  name  or  trade  mark. 

(f)  Piece-goods,  such  as  are  ordinarily  sold  by  length  or  by 
the  piece,  which 

(1)  have  not  conspicuously  stamped  in  English  numerals  on 
each  piece  the  length  thereof  in  standard  yards,  or  in 
standard  yards  and  a  fraction  of  such  yard,  according  to 
the  real  length  of  the  piece,  and 

(2)  have  been  manufactured  beyond  the  limits  of  India,  or 

(3)  having  been  manufactured  within  those  limits,  have  been 
manufactured  beyond  the  limits  of  British  India  in  prem- 
ises which,  if  they  were  in  British  India,  would  be  a  factory 
as  defined  in  the  Indian  Factories  Act,  1881. 

"Note. — For  definition  of  piece-goods,  see  Part  II. 

Indian  Merchandise  Marks  Act,  1889,  section  2  (1). — Trade 
Mark  has  the  meaning  assigned  to  that  expression  in  section  478 
of  the  Indian  Penal  Code  as  amended  by  this  Act. 


INDIAN  MERCHANDISE  MARKS  MANUAL       421 

Indian  Penal  Cole,  section  478.— A  mark  used  for  denoting  that 
goods  are  the  manufacture  or  merchandise  of  a  particular  person 
is  called  a  trade  mark,  and  for  the  purposes  of  this  Code  the 
expression  "trade  mark"  includes  any  trade  mark  which  is  regis- 
tered in  the  register  of  trade  marks  kept  under  the  Patents, 
Designs  and  Trade  Marks  Act,  1883,  and  any  trade  mark  which, 
either  with  or  without  registration,  is  protected  by  law  in  any 
British  possession  or  foreign  State  to  which  the  provisions  of  the 
one  hundred  and  third  section  of  the  Patents,  Designs  and  Trade 
Marks  Act,  1883,  are,  under  Order  in  Council,  fot  the  time  being 

applicable. 

Indian  Penal  Code,  section  28.— A  person  is  said  to  "counter- 
feit" who  causes  one  thing  to  resemble  another  thing  intending 
by  means  of  that  resemblance  to  practise  deception,  or  knowing 
it  to  be  likely  that  deception  will  thereby  be  practised. 

Explanation  l.—lt  is  not  essential  to  counterfeiting  that  the 
imitation  should  be  exact. 

Explanation  2. — When  a  person  causes  one  thing  to  resemble 
another,  and  the  resemblance  is  such  that  a  person  might  be 
deceived  thereby,  it  shall  be  presumed  until  the  contrary  is 
proved,  that  the  person  so  causing  the  one  thing  to  resemble  the 
other  thing  intended  by  means  of  that  resemblance  to  practise 
deception  or  knew  it  to  be  likely  that  deception  would  thereby  be 

practised. 

Indian  Merchandise  Marks  Act,  1889,  section  2  (2).— "Trade 
description"  means  any  description,  statement  or  other  indica- 
tion, direct  or  indirect, — 

(a)  as  to  the  number,  quantity,  measure,  gauge  or  weight 

of  any  goods,  or 
(h)  as  to  the  place  or  country  in  which,  or  the  time  at  which, 
any  goods  were  made  or  produced,  or 

(c)  as  to  the  mode   of  manufacturing   or  producing   any 

goods,  or 

(d)  as  to  the  material  of  which  any  goods  are  composed,  or 

(e)  as  to  any  goods  being  the  subject  of  any  existing  patent, 

privilege,  or  copyright; 
and  the  use  of  any  numeral,  word  or  mark  which  according  to 
the  custom  of  the  trade  is  commonly  taken  to  be  an  indication  of 
any  of  the  above  matters  shall  be  deemed  to  be  a  trade  descrip- 
tion within  the  meaning  of  this  Act. 

(3)  "False  trade  description"  means  a  trade  description  which 
is  untrue  in  a  material  respect  as  regards  the  goods  to  which  it 


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TRADING  WITH  ASIA 


is  applied,  and  includes  every  alteration  of  a  trade  description, 
whether  by  way  of  addition,  effacement  or  otherwise,  where  that 
alteration  makes  the  description  untrue  in  a  material  respect,  and 
the  fact  that  a  trade  description  is  a  trade  mark  or  part  of  a 
trade  mark  shall  not  prevent  such  trade  description  being  a 
false  trade  description  within  the  meaning  of  this  Act. 

Indian  Merchandise  Marks  Act,  1889,  section  4  (1). — The 
provisions  of  this  Act  respecting  the  application  of  a  false  trade 
description  to  goods  or  respecting  goods  to  which  a  false  trade 
description  is  applied,  shall  extend  to  the  application  to  goods 
of  any  such  numerals,  words  or  marks,  or  arrangement  or  com- 
bination thereof,  whether  including  a  trade  mark  or  not,  as  are 
or  is  reasonably  calculated  to  lead  persons  to  believe  that  the 
goods  are  the  manufacture  or  merchandise  of  some  person  other 
than  they  really  are,  and  to  goods  having  such  numerals,  words 
or  marks,  or  arrangement  or  combination,  applied  thereto. 

(2)  The  provisions  of  this  Act  respecting  the  application  of  a 
false  trade  description  to  goods,  or  respecting  goods  to  which  a 
false  trade  description  is  applied,  shall  extend  to  the  application 
to  goods  of  any  false  name  or  initials  of  a  person,  and  to  goods 
with  the  false  name  or  initials  of  a  person  applied  in  like  manner 
as  if  such  name  or  initials  were  a  trade  description,  and  for  the 
purpose  of  this  enactment  the  expression  false  name  or  initials 
means,  as  applied  to  any  goods,  any  name  or  initials — 

(a)  not  being  a  trade  mark,  or  part  of  a  trade  mark, 
and 

(h)  being  identical  with,  or  a  colourable  imitation  of,  the 
name  or  initials  of  a  person  carrying  on  business  in 
connection  witli  goods  of  the  same  description  and  not 
having  authorised  the  use  of  such  name  or  initials. 

(3)  A  trade  description  which  denotes  or  implies  that  there  are 
contained  in  any  goods  to  which  it  is  applied  more  yards,  feet  or 
inches  than  there  are  contained  therein  standard  yards,  standard 
feet  or  standard  inches  is  a  false  trade  des<;ription. 

Sea  Customs  Act,  1878,  section  19- A  (3). — Where  there  is  on 
any  goods  a  name  which  is  identical  with,  or  a  colourable  imita- 
tion of,  the  name  of  a  place  in  the  United  Kingdom  or  British 
India,  that  name,  unless  accompanied  in  equally  large  and  con- 
spicuous letters  and  in  the  same  language  and  character,  by  the 
name  of  the  country  in  which  such  place  is  situate,  shall  be 
treated  for  the  purpose  of  section  18  ...  as  if  it  were  the  name 
of  a  place  in  the  United  Kingdom  or  British  India. 


INDIAN  MERCHANDISE  MARKS  MANUAL       423 


Indian  Merchandise  Marks  Acts,  1889,  section  5  (2).— A  trade 
description  shall  be  deemed  to  be  applied  whether  it  is  woven, 
impressed  or  otherwise  worked  into  or  annexed  or  affixed  to  the 
goods  or  any  covering,  label,  reel  or  other  thing. 

(3)  The  expression  "covering"  includes  any  stopper,  cask, 
bottle,  vessel,  box,  cover,  capsule,  case,  frame  or  wrapper,  and 
the  expression  "label"  includes  any  band  or  ticket. 

Indian  Merchandise  Marks  Act,  1889,  section  2  (4). — "Goods" 
means  anything  which  is  the  subject  of  trade  or  manufacture. 

(5)  "Name"  includes  any  abbreviation  of  a  name. 

General  Clauses  Act,  1897,  section  3  (39).— "Person"  shall 
include  any  company  or  association  or  body  of  individuals, 
whether  incorporated  or  not. 

Indian  Merchandise  Marks  Act,  1889,  section  21. — In  the  case 
of  goods  brought  into  British  India  by  sea,  evidence  of  the  port  of 
shipment  shall,  in  a  prosecution  for  an  offence  against  this  Act 
or  section  18  of  the  Sea  Customs  Act,  1878,  as  amended  by  this 
Act,  be  prima  fade  evidence  of  the  place  or  country  in  which  the 
goods  were  made  or  produced. 

Indian  Merchandise  Marks  Act,  1889,  section  21. — An  officer 
of  the  Government  whose  duty  it  is  to  take  part  in  the  enforce- 
ment of  this  Act  shall  not  be  compelled  in  any  Court  to  say 
whence  he  got  any  information  as  to  the  commission  of  any 
offence  against  this  Act. 

Sea  Customs  Act,  1878,  section  19-A. — Clauses  (2),  (4),  (5), 
(6)  enable  the  Governor-General  in  Council  to  make  regulations 
respecting  the  conditions,  if  any,  to  be  fulfilled  before  such  deten- 
tion and  confiscation,  to  determine  the  information,  notices  and 
security  to  be  given,  the  evidence  requisite  for  any  of  the  purposes 
of  the  section  and  the  mode  of  verification  of  such  evidence,  as 
well  as  the  reimbursement  of  public  officers  and  the  State  by  an 
informant  for  expenses  and  damages  incurred  in  respect  of  any 
detention  made  on  his  information,  and  of  any  proceedings 
resulting  therefrom.  Section  19-A  (1)  authorises  the  Customs 
authorities  to  require  regulations  so  issued  to  be  complied  with 
before  taking  proceedings. 

Indian  Merchandise  Marks  Act,  1889,  section  16  (1). — The 
Governor-General  in  Council  may,  by  notifiication  in  the  Gazette 
of  India  and  in  local  official  Gazettes,  issue  instructions  for  observ- 
ance by  Criminal  Courts  in  giving  effect  to  any  of  the  provisions 
of  this  Act. 

(2)  Instructions  under  sub-section   (1)   may  provide,  among 


1 


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TRADING  WITH  ASIA 


other  matters,  for  the  limits  of  variation,  as  regards  number, 
quantity,  measure,  gauge  or  weight,  which  are  to  be  recognized 
by  Criminal  Courts  as  permissible  in  the  case  of  any  goodi. 

2fote. — Such  instructions  are  also  a  guide  to  Customs  officers. 

Indian  Merchandise  Marks  Act,  1889,  section  19. — For  the  pur- 
poses of  section  12  of  this  Act  and  clause  (f)  of  section  18  of  the 
Sea  Customs  Act,  1878,  as  amended  by  this  Act,  the  Governor- 
General  in  Council  may,  by  notification  in  the  Gatette  of  India, 
declare  what  classes  of  goods  are  included  in  the  expression  "piece- 
goods"  such  as  are  ordinarily  sold  by  length  or  by  the  piece. 

Indian  Merchandise  Marks  Act,  1889,  section  20. — This  section 
enables  the  Governor-General  in  Council  to  make  rules  regulating 
with  respect  to  any  goods  the  first  selection  and  testing  of  sam- 
ples, the  value  of  the  evidence  so  obtained,  the  condition!  under 
which  a  further  selection  and  testing  may  be  made,  and  the 
value  of  the  further  evidence  so  obtained. 

For  goods  not  covered  by  such  rules  the  section  enables  Cus- 
toms officers  to  issue  orders  having  a  similar  effect,  namely: 

(2)  The  .  .  .  officer  of  Customs  .  .  .  having  occasion  to  ascer- 
tain the  number,  quantity,  measure,  gauge  or  weight  of  the 
goods,  shall,  by  order  in  writing,  determine  tlie  number  of  samples 
to  be  selected  and  tested  and  the  manner  in  which  the  samples 
are  to  be  selected. 

(3)  The  average  of  the  results  of  the  testing  in  pursuance 
of  ...  an  order  under  sub-section  (2)  shall  be  prim&  facie 
evidence  of  the  number,  quantity,  measure,  gauge  or  weight,  as 
the  case  may  be,  of  the  goods. 

(4)  If  a  person  having  any  claim  to,  or  in  relation  to,  any 
goods  of  which  samples  have  been  selected  and  tested  in  pursu- 
ance of  ...  an  order  under  sub-section  (2)  desires  that  any 
further  samples  of  the  goods  be  selected  and  tested,  they  shall, 
on  his  written  application  and  on  the  payment  in  advance  by 
him  to  the  .  .  .  officer  of  Customs  ...  of  such  suras  for  defray- 
ing the  cost  of  the  further  selection  and  testing  as  the  .  .  . 
officer  may  from  time  to  time  require,  be  selected  and  tested  to 
such  an  extent  as  ...  the  officer  of  Customs  may  determine  in 
the  circumstances  to  be  reasonable,  the  sami)les  being  selected  in 
manner  prescribed  under    .  .  .  sub-section  (2).  .  .  . 

(5)  The  average  of  the  results  of  the  testing  referred  to  in 
sub-section  (3)  and  of  the  further  testing  under  sub-section  (4) 
shall  be  conclusive  proof  of  the  number,  quantity,  gauge  or 
weight,  as  the  case  may  be,  of  the  goods. 


INDIAN  MERCHANDISE  MARKS  MANUAL       425 

Part   II. — Notifications    Under   the    Indian    Merchandise 
Marks  Act,  1889,  and  Connected  Acts. 

No.  1430,  dated  the  6th  April,  1891,  as  subsequently  amended. — 
In  exercise  of  the  powers  conferred  by  section  19-A,  sub-section 
(2),  of  the  Sea  Customs  Act,  1878  (as  amended  by  section  11 
of  the  Indian  Merchandise  Marks  Act,  1889),  and  sections  19  and 
20  of  the  Indian  Merchandise  Marks  Act,  1889  (as  amended  by 
Act  IX  of  1891),  the  Governor-General  in  Council  is  pleased  to 
make  the  subjoined  rules  and  orders : 

1.  Piece-goods,  such  as  are  ordinarily  sold  by  length  or  by  the 
piece,  shall  be  deemed  to  include  woollen  goods  of  all  kinds  and 
the  undermentioned  descriptions  of  cotton  goods,  namely: 

Book-binding  cloth. 
Brocades. 
Cambrics. 
Canvas. 
Crimps. 

Checks,  spots  and  stripes. 
Chudders. 

Coatings  including  tweeds,  cash- 
meres and  serges. 
Crape. 
Denims. 

Dhotis,  single  or  in  pairs. 
Domestics. 
Dorias. 
Drills. 

Flannel  and  flannelettes. 
Gauze. 
Grenadines. 
Harvards. 
Italian  cloth. 
Jaconets. 
Jeans. 
Lappets. 

Lawns,  including  allovers. 
Lenos. 
Long  cloth. 
Madapollams. 
Meltons,  dyed  and  printed. 


Mulls. 

Muslins. 

Nainsooks. 

Net. 

Oxfords. 

Printers. 

Prints. 

Saris,  single  or  in  pairs. 

Scarves,  including  cotton  shawls 
and  dupetas. 

Sheetings. 

Shirtings,  including  dyed  shirt- 
ings. 

Silecia. 

Spanish  stripes. 

Tanjibs. 

Ticks. 

Trouserings. 

Tussores. 

Twills. 

T-cloth  and  Mexicans. 

Umbrella  cloth. 

Velvets  and  velveteen. 

Venetian  cloth. 

Vestings,  including  mattings  and 
piques. 

Waist  coatings. 

Zephyr  cloth. 


2.  Other  classes  of  piece-goods  shall  not  be  detained  if  un- 
stamped ;  and  unstamped  cotton  and  woollen  piece-goods  imported 
for  the  personal  use  of  individuals  or  private  associations  of 
individuals  and  not  for  trade  purposes  shall  not  be  detained. 

3.  Examinations  of  packages  to  ascertain  whether  the  goods 
mentioned  in  Rule  1  are  stamped  shall  be  made  at  frequent  inter- 


I 


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TRADING  WITH  ASIA 


\. 


vals  at  the  discretion  of  the  Customs  Colh«tor  and  either  under 
his  personal  instructions  or  under  general  orders  and  instructions 
given  by  him  to  an  Assistant  Collector. 

4.  The  piece-goods  contained  in  the  packages  so  examined  need 
not  be  examined,  when  found  to  be  stamped,  to  test  the  accuracy 
of  the  stamping,  except  on  information  received,  or  when  the 
Customs  Collector  has  reason  to  suspect  that  the  stamping  is 
xaise. 

6.  All  measurements  of  piece-goods  shall  be  made  on  the  table. 

6.  Yarns  need  not  be  examined  or  measured,  except  on  infor- 
naation  received,  or  when  the  Collector  has  reason  to  suspect  that 
the  trade  description  is  false. 

7.  An  examination  of  yarns  to  test  the  accuracy  of  the  descrip- 
tion of  count  or  length  shall  be  made,  in  the  first  instance,  up  to 
the  limit  of  one  bundle  in  every  one  hundred  bales  or  fraction  of 
one  hundred  bales  in  the  consignment. 

8.  If,  on  such  examination,  the  difference  between  the  average 
count  or  length,  and  the  described  count  or  length  is  in  excess  of 
the  variations  permitted  in  paragraphs  III  and  IV  of  the  Noti- 
vr^'^^i?..''^  }^^  Government  of  India  in  the  Home  Department, 
No.  1474  (Judicial),  dated  the  13th  Novemb.»r,  1891,  the  importer 
may  require  a  further  examination  to  be  made  up  to  the  limit  and 
on  the  condition  stated  in  Rule  9. 

9.  The  test  to  determine  length  of  yams  fihaU  be  appUed  as 
follows : 

From  every  one  hundred  bales,  or  fraction  of  100  bales,  in  a 
consignment  one  bundle  should  be  selected  at  random.  The 
hanks  m  this  bundle  should  then  be  measured  on  the  wrap-reel 
one  after  the  other,  in  the  presence  of  a  representative  of  the 
importer,  and  the  lengths  noted,  the  process  being  continued 
(withm  the  limits  of  the  bundle)  until  either  the  importer  is 
satisfied  that  the  yam  is  short,  or  the  average  of  the  lengths 
noted  shows  that  it  is  of  full  length. 

When  the  importer  is  dissatisfied  with  this  test,  he  may,  on 
payment  of  the  cost,  require  the  Customs  (.^oUector  to  measure 
more  hanks  up  to  1  per  cent  of  the  total  number  of  hanks  in 
the  consignment,  such  hank  being  taken  at  random  by  an  officer 
ot  Customs  out  of  any  bundles  in  the  consignment. 

10.  The  Customs  Collector  may  require  from  any  informant 
a  security  not  exceeding  five  hundred  rupees.     If  the  CoUector 
sliould  be  satisfied  that  the  information  given  is  wilfuUv  false 
the  security  shall  be  forfeited.  ' 


INDIAN  MERCHANDISE  MARKS  MANUAL      427 

No.  1474,  dated  the  13th  November,  1891,  as  subsequently 
amended. — In  exercise  of  the  powers  conferred  by  section  16  of 
the  Indian  Merchandise  Marks  Act,  IV  of  1889,  and  in  super- 
session of  all  existing  orders  on  the  subject,  the  Governor-General 
in  Council  directs  that  Criminal  Courts,  in  giving  effect  to  the 
provisions  of  the  Act  in  respect  of  trade  descriptions  of  quantity, 
measure,  or  weight  of  the  goods  specified  hereunder,  shall  observe 
the  following  instructions: 

I. — A  trade  description  of  length  stamped  on  grey,  white  or 

coloured  cotton  piece-goods  shall  not  be  deemed  to  be 

false  in  a  material  respect,  unless 

(a)  where  a  single  length  is  stamped,  the  description  ex- 

ceeds the  actual  length  by  more  than 

4  inches  in  pieces  stamped  as  10  yards  long  and  under; 

5  inches  in  pieces  stamped  as  above  10  yards  and  up  to  23 

yards  long; 
7  inches  in  pieces  stamped  as  above  23  yards  and  up  to  36 

yards  long; 
9  inches  in  pieces  stamped  as  above  36  yards  and  up  to  47 

yards  long; 
18  inches  in  pieces  stamped  as  above  47  yards  long: 

Provided  that  the  average  length  of  the  goods  in  question  shall 
not  be  less  than  the  stamped  length; 

(b)  where  a  maximum  and  a  minimum  length  are  stamped, 

the  described  maximum  length  is  greater  than  the 
actual  length  by  more  than 

9  inches  in  piece-goods  under  35  yards  long; 
18  inches  in  piece-goods  35  yards  and  up  to  47  yards  long; 
36  inches  in  piece  goods  above  47  yards  long: 

Provided  that  no  such  piece  shall  measure  less  than  the  mini- 
mum stamped  length. 

II. — ^A  trade  description  of  width  stamped  on  grey,  white,  or 
coloured  cotton  piece-goods  shall  not  be  deemed  to  be 
false  in  a  material  respect,  unless  the  description 
exceeds  the  actual  width  by 

half  an  inch  in  pieces  stamped  as  40  inches  or  less  in  width; 
three-quarters  of  an  inch  in  pieces  stamped  as  over  40  inches 

or  under  59  inches  in  width; 
one  inch  in  pieces  stamped  as  59  inches  or  more  in  width: 

Provided  that  the  average  width  of  the  goods  in  question  shall 
not  be  less  than  the  stamped  width. 


H 


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TRADING  WITH  ASIA 


INDIAN  MERCHANDISE  MARKS  MANUAL      429 


'I 


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■'III '. 


lit 


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III. — ^A   trade  description   of  count  or  number,   length   or 

weight,  apphed  to  grey,  or  bleached  cotton  yarn,  shall 

not  be  deemed  to  be  false  in  a  material  respect,  unless 

(a)  the  described  count  or  number  is  greater  or  leas  than 

the  actual  count  or  number  by  more  than  5  per  cent, 

provided  that  the  average  count  of  the  whole  of  the 

yam  in  question  is  not  greater  or  less  than  the 

described  count;  or 

(h)  the  average  length  of  the  whole  number  of  hanks  in  a 

bundle  is  less  than  840  yards;  or 

(c)  in  a  bundle  of  yarn  of  any  count  under  50,  described 

as  being  ten  pounds  in  weight,  the  number  of  knots 
of  twenty  hanks  each  is  not  half,  or  the  number  of 
knots  of  ten  hanks  each  is  not  the  same  as,  and  the 
number  of  knots  of  five  hanks  is  not  double,  the 
described  count  for  number  of  the  yam;  or 

(d)  in  a  bundle  of  yam  of  any  count  under  50,  described 

as  being  5  lbs.  in  weight,  the  number  of  knots  of  20 
hanks  each  is  not  a  quarter  of,  or  the  number  of 
knots  of  10  hanks  each  is  not  half,  or  the  number 
of  knots  of  6  hanks  each  is  not  the  same  as,  the 
described  count  or  number  of  the  yam ;  or 

(e)  in  a  bundle  of  yam  of  any  count  from  50  upwards, 

the  number  of  knots  of  twenty  hanks  each  is  not 
half,  or  the  number  of  knots  of  40  hanks  each  is  not 
a  quarter  when  the  described  weight  is  ten  pounds, 
and  is  not  a  quarter  or  an  eighth,  when  the  de- 
scribed weight  is  five  pounds,  of  the  count  or 
number  of  the  yam;  or 

(f)  in  the  case  of  bleached  yarn,  the   described  weight 

exceeds  the  actual  weight  by  more  than 

7%  per  cent  in  counts  from  1  to  8; 
5  per  cent  in  counts  from  above  8  to  18 ; 
4  per  cent  in  counts  from  above  18  to  30; 
2%  per  cent  in  counts  from  above  30  to  80. 

rV. — ^A  trade  description  of  count  or  number  applied  to  a 
bundle  of  dyed  cotton  yam  shall  be  accepted  as  indi- 
cating length  only,  the  hank  being  taken  to  measure 
840  yards,  and  it  shall  be  deemed  to  be  false  in  a 
material  respect  if  the  average  length  of  the  hanks 
in  a  bundle  is  less  than  819  yards. 


V. — A  trade  description  of  length  applied  to  thread  of  any 
kind  (of  cotton,  wool,  flax  or  silk)  shall  not  be  deemed 
to  be  false  in  a  material  respect,  unless  it  exceeds  the 
actual  length  by  more  than  1  per  cent. 
VI. — The   dimensions   of  goods  on   which   their   length   or 
width  is  stamped  shall  be  determined  by  measurement 
in  imperial  yards  of  thirty-six  inches. 
The  grant  of  rewards  is  controlled  by  rules  issued  with  Reso- 
lution No.  1088-S.  R.,  dated  the  23rd  Febmary,  1901,  which  are 
applicable  generally  to   all  cases  under  the   Sea  Customs  and 
Indian  Merchandise  Marks  Acts.     The  Resolution  states  that  it 
is  undesirable  in  practice  to  grant  rewards  to  gazetted  officers, 
but  it  was  held  in  letter  No.  4080-S.  R.,  dated  the  3rd  August, 
1901,  to  the  Government  of  Madras  that  the  prohibition  does  not 
apply  to  gazetted  officers  below  the  rank  of  Assistant  Collector. 

Part  III. — Instructions  for  the   Observance  of   Customs 
Officers. 

l^ote. — The  word  "Act"  when  used  in  these  rules,  unless  the  con- 
trary is  apparent,  is  intended  to  include,  in  addition  to  the  Indian 
Merchandise  Marks  Act,  the  connected  provisions  of  the  Sea  Customs 
Act. 

1.  The  following  classes  of  goods  are  exempt  from  the  oper- 
ation of  the  Act: 

(a)  Goods  not  having  applied  to  them  any  marks,  trade 
descriptions,  or  other  indications  whatever  of  the 
nature  contemplated  in  the  Act,  with  the  exception  of 
piece-goods  which  require  to  be  stamped  under  section 
10  (f)  corresponding  to  section  18  (f)  of  the  Sea 
Customs  Act. 
(h)  Goods  imported  for  the  personal  use  of  individuals  or 
private  associations  of  individuals,  and  not  for  trade 
purposes.  Thus,  cloth  imported  by  an  individual  for 
his  own  use  or  band  instruments  by  a  regimental  band 
for  the  use  of  the  members,  are  exempt;  but  not  rails 
imported  by  a  railway  company,  or  cutlery  and  glass- 
ware by  a  hotel  (see  also  paragraph  2,  Notification 
No.  1430,  dated  the  6th  April,  1891,  as  subsequently 
amended,  quoted  in  Part  II). 
Exemptions  from  particular  provisions  of  the  Act  are  noted 
later  in  connection  with  the  provisions  concerned. 


II 


430 


TRADING  WITH  ASIA 


n 


2.  Goods  affected  by  the  Act  may  be  classified  as  follows: 

A. — Goods  having  applied  to  them  counterfeit  trade  marks 
or  other  indications  that  they  are  the  manufacture  or 
merchandise  of  a  person  whose  manufacture  or  mer- 
chandise they  are  not. 
B. — Goods  having  applied  to  them  false  trade  descriptions  or 
other  indications  in  respect  of  the  country  in  which 
they  were  made  or  produced. 
C. — Goods  having  applied  to  them  trade  descriptions  that 

are  false  also  in  other  respects. 
D. — ^Piece-goods    which    have    not    the    lengths    properly 
stamped  on  each  piece. 
The  importation  of  all  such  goods  is  proliibited  by  section  18 
(d),  (e)  and  (f)  of  the  Sea  Customs  Act. 

It  has  been  ruled  that  the  indication  alluded  to  in  the  words 
"any  description,  statement,  or  other  indicati<m,  direct  or  indirect," 
in  the  definition  of  trade  description,  must  be  in  the  nature  of  a 
description  or  statement  and  does  not  include  the  "make  up"  of 
goods.  The  "make  up"  of  goods  does  not  therefore  amount  to  a 
trade  description  in  itself. 

A, — Goods  having  applied  to  them  counterfeit  Trade  Marks  or 
other  indications  that  they  are  the  manufacture  or  merchan- 
dise of  a  person  whose  manufacture  or  merchandise  they 
are  not, 

3.  The  indications  referred  to,  in  addition  to  (1)  counterfeit 
trade  marks,  include  (2)  any  such  numerals,  words,  or  marks,  or 
arrangement  or  combination  thereof,  whether  including  a  trade 
mark  or  not,  as  are  or  is,  reasonably  calculated  to  lead  persons  to 
believe  that  the  goods  are  the  manufacture  or  merchandise  of  some 
person  other  than  they  really  are,  or  (3)  any  false  name  or 
initials  of  a  person,  that  is,  any  name  or  initials 

(a)  not  being  a  trade  mark  or  part  of  a  trade  mark,  and 

(h)  being  identical  with,  or  a  colourable  imitation  of,  the 

name  or  initials  of  a  person  carrying  on  business  in 

connection  with  goods  of  the  same  description  and  not 

having  authorized  the  use  of  such  name  or  initials. 

Itente  (2)  and  (3)  of  this  rule  incorporate  section  4  (1)  and 

(2)  of  the  Indian  Merchandise  Marks  Act.    Without  these  clauses 

marks  imitating  another  person's  marks  would  only  be  controlled 

if  they  constituted  a  counterfeit  trade  mark,  or  happened  inci- 


INDIAN  MERCHANDISE  MARKS  MANUAL       431 

dentally  to  constitute  a  false  trade  description  of  country  of 
manufacture,  material  or  the  like  within  the  meaning  of  any  of 
the  clauses  of  section  2  (2).  But  two  further  classes  of  cases 
may  arise: 

A  manufacturer's  or  merchant's  marks  may  include  many  other 
marks  or  combinations  of  marks  than  a  trade  mark  and  goods  may 
be  known  by  such  marks  better  than  by  the  trade  mark  itself. 
For  example,  piece-goods  are  sometimes  identified  in  the  native 
market  by  their  coloured  labels  or  even  by  the  manufacturer's  or 
merchant's  number  impressed  on  them.  Secondly,  the  merchan- 
dise of  a  particular  firm  may  similarly  be  known  by  the  firm's 
name  or  initials,  which  may  not  be  included  in  the  trade  mark. 
The  provisions  cited  are  intended  to  meet  cases  in  which  such 
marks,  numbers,  etc.,  are  used  by  other  parties,  or  in  which  the  use 
of  such  names  or  initials  is  not  covered  or  condoned  by  the  neces- 
sary authorization.  In  such  cases  the  procedure  to  be  adopted 
by  Customs  officers  will  be  that  prescribed  below  in  rule  9. 

4.  The  importation  of  goods  having  applied  to  them  a  counter- 
feit trade  mark  or  any  of  the  indications  described  is  prohibited 
by  section  18  (d)  of  the  Sea  Customs  Act,  read  with  section  4(1) 
and  (2)  of  the  Indian  Merchandise  Marks  Act.  These  provisions 
are  intended  not  only  for  the  protection  of  manufacturers  and 
merchants  against  the  piracy  of  their  marks,  but  also  for  the 
protection  of  the  public  against  the  supply  of  goods  of  an  inferior 
or  unknown  quality  under  cover  of  a  well-known  brand.  Al- 
though therefore  action  will  ordinarily  be  taken  upon  information 
received  from  the  manufacturer  or  merchant  aggrieved.  Cus- 
toms officers  are  not  debarred  from  acting  upon  their  own  initi- 
ative. 

5.  When  information  of  the  nature  referred  to  in  rule  4  is 
received,  unless  it  is  in  writing  and  supplies  all  necessary  details, 
the  informant  should  be  required  to  furnish  the  Collector  or  Chief 
Customs  officer  with  a  notice  in  the  form  A  appended.  Upon 
arrival  of  the  goods,  if  the  Collector  or  Chief  Customs  officer 
is  of  opinion  that  there  is  clearly  no  reasonable  cause  for  deten- 
tion, he  will  permit  delivery  to  the  consignee.  Otherwise  he  will 
detain  the  goods  provisionally  and  require  the  informant  either 

(a)  to  furnish  him  with  an  indemnity  bond  in  the  form  B 
appended  within  twenty -four  hours;  or 

(h)  to  deposit  security  in  cash  or  currency  notes  to  the 
amount  of  10  per  cent  on  the  estimated  value  of  the 
goods  to  reimburse  any  expenses  incurred  or  damages 


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TRADING  WITH  ASIA 


awarded  in  respect  of  the  detention,  or  of  any  pro- 
ceedings consequent  thereon,  pending  the  execution  of 
the  bond,  which  in  such  eases  should  be  furnished 
within  four  days. 
Upon  receipt  of  the  bond  duly  executed  the  security  deposit 
may  be  returned. 

If  the  indemnity  bond  or  the  security,  as  the  case  may  be,  be 
not  furnished  within  twenty-four  hours,  or  if  the  bond  following 
the  security  be  not  furnished  within  four  days,  the  Collector  will 
release  the  goods. 

If  the  bond  be  furnished  the  Collector  will  detain  the  goods  for 
one  month  from  the  date  of  the  request  for  the  detention  in  order 
to  allow  of  the  applicant  filing  a  suit  or  taking  other  proper  pro- 
ceedings to  have  his  rights  in  respect  of  them  declared  or  ascer- 
tained, provided  that  if  he  institute  a  suit  or  take  other  proper 
proceedings  for  the  purpose  stated  within  the  period  named  the 
goods  should  be  detained  until  a  final  decree  in  the  suit  or  order 
in  the  proceedings  has  been  obtained,  such  decree  or  order  in  the 
case  of  an  appeal  being  that  of  the  highest  Appellate  Court  to 
which  the  appeal  is  taken.  If  the  applicant  does  not  file  a  suit 
or  take  other  proper  proceedings  as  above  stated  within  the  period 
named,  the  goods  will  be  released. 

6.  When  an  informant  is  not  in  possession  of  information  of 
any  definite  case  of  importation  or  contemplated  importation, 
but  has  reason  to  believe  that  his  marks,  etc.,  are  being  infringed 
and  wishes  to  have  Customs  oflScers  put  on  the  watch  for  pos- 
sible infringements,  his  application  may  be  entertained  if  the 
Collector  or  Chief  Customs  officer  is  satisfied  that  it  is  bond  fide 
and  reasonable,  and  orders  may  be  issued  to  Customs  officers  to 
take  a  note  of  the  marks,  etc.,  concerned  with  a  view  to  taking 
action  under  paragraph  8  should  occasion  arise.  Such  orders 
should  only  have  effect  for  three  months,  but  may  be  renewed  on 
the  expiry  of  the  period  upon  the  Collector  being  satisfied  that 
there  are  reasonable  grounds  for  the  renewal. 

7.  Any  formal  registration  of  marks,  names,  or  initials  in  the 
Customs  offices  is  prohibited. 

8.  The  occasions  on  which  Customs  officers  should  take  action 
upon  their  own  initiative  will  naturally  be  rare,  but  will  occur 
when  upon  an  examination  of  the  goods  it  is  appar^t  that  an 
attempt  has  been  made  to  counterfeit  some  established  mark  or 
other  indication,  such  as  is  well  known  to  the  officer  concerned. 
In  such  cases  the  Collector  or  Chief  Customs  officer  will  cause 


INDIAN  MERCHANDISE  MARKS  MANUAL       433 

the  goods  to  be  provisionally  detained  for  a  period  not  exceeding 
four  days,  and  send  intimation  to  any  local  representative  of  the 
person  whose  name  or  marks  appear  to  be  counterfeited,  with 
the  request  that  he  will  take  action  if  he  wishes  the  detention 
continued  as  described  in  clauses  (a)  and  (b)  of  rule  5  above. 
The  subsequent  procedure  will  follow  that  detailed  above. 

If  there  is  no  local  representative  the  Collector  or  Chief  Cus- 
toms officer  will  pass  the  goods,  but  should  send  intimation  by 
letter  with  sufficient  particulars  of  the  counterfeit  marks  or  other 
indications  to  the  person  whose  name  or  marks  appear  to  have 
beeen  counterfeited,  describing  the  procedure  to  be  adopted  under 
these  rules,  should  he  wish  to  have  any  future  consignments 
detained. 

9.  The  powers  of  enquiry  which  the  Collector  possesses  in 
regard  to  goods  detained  under  the  above  rules  are  strictly  limited 
and  are  only  intended  to  enable  him  to  satisfy  himself  that  the 
counterfeit  is  plain  and  manifest  and  that  there  can  be  no  real 
contest  in  the  matter.  For  any  purpose  beyond  this,  his  duty  is 
to  detain,  under  protection  of  an  indemnity  bond,  the  goods  until 
the  question  of  title  is  settled  by  a  competent  court.  He  should 
not  therefore  ordinarily  take  proceedings  under  the  Sea  Customs 
Act  for  the  confiscation  of  goods  detained  under  the  above  rules, 
or  for  the  imposition  of  a  penalty,  upon  his  own  responsibility, 
except  in  the  following  cases,  namely,  when  the  marks  on  the 
goods  are  admitted  by  the  importer  to  be  objectionable  either  as 
counterfeit  trade  marks,  or  as  being  of  the  description  stated  in 
section  4  (1)  and  (2)  of  the  Indian  Merchandise  Marks  Act; 
or  when  the  Collector  or  Chief  Customs  officer  is  satisfied  by  the 
production  of  a  duly  certified  copy  of  an  order  by  a  competent 
court  that  they  have  been  declared  by  such  a  competent  court 
either  in  British  India  or  in  the  United  Kingdom  to  be  so  objec- 
tionable, and  provided  that  in  this  case  no  claim  is  made  on 
behalf  of  the  importer  of  a  right  to  use  the  marks  upon  grounds 
not  covered  by  the  order  cited.  If  such  a  claim  be  made  the 
procedure  laid  down  in  rule  5  should  be  followed  in  respect  of 
the  importation. 

B. — Goods  havinff  applied  to  them  false  trade  descriptions  or 
other  indications  in  respect  of  the  country  in  which  they  are 
made  or  produced. 

10.  Under  this  head  three  principal  classes  are  to  be  distin- 
guished: 


\ 


Ri  1 


434 


TRADING  WITH  ASIA 


ii  I 


(a)  Goods  made  or  produced  beyond  the  limits  of  the  United 

Kingdom  and  British  India  and  bearing  or  purporting 
to  bear  the  name  or  trade  mark  of  any  person  who  is 
a  manufacturer,  dealer  or  trader  in  the  United  King- 
dom or  British  India. 

(b)  Goods  made  or  produced  beyond  the  limits  of  the  United 

Kingdom  and  British  India,  to  which  is  applied  a 
false  trade  description  for  indication  (other  than  the 
name  or  trade  mark  of  a  manufacturer,  dealer  or 
trader  in  the  United  Kingdom  or  British  India)  indi- 
cating that  they  were  made  or  produced  in  the  United 
Kingdom  or  British  India. 

(c)  Goods  made  or  produced  in  one  foreign  coimtry,  but 

bearing  a  false  trade  description  indicating  that  they 
were  made  or  produced  in  another. 

11.  The  importation  of  goods  falling  under  either  of  these 
three  classes  is  equally  prohibited  by  law  under  section  18  (d) 
and  (e)  of  the  Sea  Customs  Act  and  Customs  officers  should  of 
their  own  motion  detain  goods  faUing  under  any  of  the  three 
classes. 

AToJe.— Samples  or  patterns  readily  distinguishable  as  such  and 
valueless  m  themselves  are  not  to  be  treated  as  subject  to  the  pro- 
visions of  the  Act  referring  to  the  marking  of  indication  of  origin. 

12.  The  law  (section  13  of  the  Indian  Merchandise  Marks 
Act)  also  states  that  evidence  of  the  port  of  shipment  is  primd 
facie  evidence  of  the  country  in  which  the  goods  were  made  or 
produced.  This  ruling,  however,  should  be  applied  with  discre- 
tion when  the  port  of  shipment  is  a  place  of  transit  from  some 
inland  country  like  Rotterdam  or  Antwerp  with  respect  to  Ger- 
many, or  Trieste  with  respect  to  Italy  or  Switzerland.  In  the 
case  of  goods  shipped  from  these  ports,  the  statement  that  the 
goods  are  the  make  or  produce  of  an  inland  country  may  be 

accepted  if  there  is  no  reasonable  ground  to  suspect  the  country 
of  origin.  '' 

13.  Although  the  importation  of  goods  falling  under  either  of 
these  three  classes  is  prohibited,  the  goods  may  yet  be  admitted  if 

there  is  applied  to  them  a  counter-indication  of  origin  accom- 
panying 

(1)  the  name  or  trade  mark  in  the  case  of  goods  falling 

under  class  (a); 

(2)  the  false  trade  description  in  the  case  of  goods  falling 

under  classes  (h)  and  (c). 


INDIAN  MERCHANDISE  MARKS  MANUAL      435 

14.  In  the  former  case,  the  nature  of  the  counter-indication 
required  to  enable  the  goods  to  be  imported  is  distinctly  and  spe- 
cifically provided  for  by  the  law  [see  section  18  (e)  of  the  Sea 
Customs  Act.] 

(1)  The  name  or  trade  mark  must  be  accompanied  by  a 

definite  indication  of  the  goods  having  been  made  or 
produced  in  a  place  beyond  the  limits  of  the  United 
Kingdom  or  British  India. 

(2)  The  country  in  which  that  place  is  situated  must,  in  that 

indication,  be  indicated  in  letters  as  large  and  conspicu- 
ous as  any  letter  in  the  name  and  trade  mark,  and  in  the 
same  language  and  character  as  the  name  and  trade 
mark. 
Where,  therefore,  goods  made  elsewhere  than  in  the  United  King- 
dom or  British  India  bear  the  name  or  trade  mark,  being  or  pur- 
porting to  be  the  name  or  trade  mark  of  a  manufacturer,  dealer 
or  trader  in  the  United  Kingdom  or  British  India,  the  counter- 
indication  must  distinctly  specify  the  country  of  origin  or  manu- 
facture.   In  such  cases  the  form  "Made  in "  must  be 

used ;  other  expressions  such  as  "Made  Abroad,"  "Not  made  in  the 
United  Kingdom  or  British  India,"  "Foreign  make,"  "Foreign 
Produce"  are  not  permissible. 

15.  The  law  does  not,  however,  require  a  specific  counter-indica- 
tion in  other  cases.  In  the  case  of  goods  falling  under  class  (b) 
or  (c),  the  Customs  officers  cannot  insist  that  the  false  trade  indi- 
cation should  be  corrected  by  a  definite  indication  of  the  country 
of  origin,  and  any  indication  negativing  the  implication  that  the 
goods  were  made  or  produced  in  another  country  is  sufficient.  In 
such  cases,  the  following  and  similar  expressions  are  admissible: 

Goods  falling  under  class  (h)   Made  in 

Made  Abroad. 

Not  made  in  the  United  Kingdom  or 

British  India. 
Foreign  make. 
Foreign  produce. 

Goods  falling  under  class  (c)   Made  in 

Not  made  in  X  (being  the  country  in 
which,  from  the  false  trade  descrip- 
tion, the  goods  might  be  supposed 
to  have  been  manufactured). 
Note. —  (1)  Goods  made  or  produced  in  the  United  Kingdom  bear- 
ing the  name  or  trade  mark  of  a  British  Indian  trader  or  dealer  are 
not  subject  to  the  provisions  of  the  Act  referring  to  the  marking  of 
origin  even  when  the  marking  is  in,  or  includes,  vernaculars. 


436 


TRADING  WITH  ASIA 


1 1* 


(2)  In  the  case  of  goods  made  or  produced  in  the  United  Kingdom 
bearing  an  indication  of  make  or  production  in  any  other  country,  a 
counter-indication  of  British  origin  should  be  required.  Examples:— 
The  expression  "Munich  Beer"  on  bottles  containing  beer  made  in 
England  must  have  some  suoh  counter-indication  as  "Made  In  Eng- 
land" or  "Not  made  in  Germany."  The  exprcnsion  "Amritaar"  on 
shawls  made  in  England  must  have  some  such  counter-indication  as 
"Made  in  England"  or  "Not  made  in  India." 

(3)  In  the  case  of  goods  made  or  produced  in  a  foreign  country, 
the  trade  description  indicative  of  origin  in  British  India  or  the 
United  Kingdom  which  has  been  corrected  by  the  use  of  such  expres- 
sions as  "Made  Abroad,*'  "Not  made  in  the  United  Kingdom  or 
British  India,"  may  still  be  false  if  the  description  contains  an  indi- 
cation of  origin  in  one  foreign  country  when  the  goods  were  actually 
made  or  produced  in  another  As  for  instance.  "Old  Brown  Cognac, 
Made  Abroad,"  which  was  actually  made  in  Germany.  In  such  cases, 
a  further  counter-indication  is  necessary.  This  can  be  done  in  two 
ways.  Either  the  name  of  the  country  of  manufacture  or  production 
may  be  substituted  for  such  phrases  as  "Made  Abroad;"  or  the 
counter-indication  must  run  "Not  made  in  the  United  Kingdom  or 
British  India  or  X  (X  being  the  country  in  which  the  goods  might 
be  supposed  to  be  manufactured)."  Thus  in  the  example  given,  "Not 
made  in  France"  must  be  added  to  the  description  or  the  words 
"Made  in  Germany"  must  be  substituted  for  the  words  "Made 
Abroad." 

16.  In  the  ease  of  goods  with  distinguishable  parts  or  constitu- 
ents manufactured  or  produced  in  different  countries,  an  indica- 
tion of  origin  in  any  country  on  one  part  should  be  taken,  in  the 
absence  of  anything  to  the  contrary,  as  applicable  to  the  whole. 

Example. — A  British  or  German  hall-mark  on  the  case  of  a  sil- 
ver watch  should  be  held  to  include  the  works  and  dial-plate  also, 
and  if  the  works  and  dial-plate  are  not  of  English  or  German 
make,  as  the  case  may  be,  a  counter-indication  should  be  required 
on  the  latter. 

17.  In  the  case  of  goods  with  indistinguishable  parts  or  constit- 
uents made  in  different  countries,  a  general  statement  such  as 
"Produce  of  different  countries"  is  permissible. 

Example.— Brandy  blended  in  the  United  Kingdom  from  the 
produce  of  France  or  Italy. 

Note.^ln  the  case  of  goods  with  indistinguishable  parts  or  con- 
stituents made  in  the  United  Kingdom  and  other  countries,  the  above 
counter-indication  will  be  sufficient  even  when  the  goods  bear  the 
name  or  trade  mark  of  a  Britiah  or  British  Indian  trader  or  dealer. 

18.  The  names  of  provinces  or  towns  may  only  be  substituted 


INDIAN  MERCHANDISE  MARKS  MANUAL-      437 

for  those  of  countries  if  they  are  so  extensively  known  that  the 
Indian  consumer,  is  not  likely  to  be  misled.  Names  such  as  Paris, 
Bohemia,  Berlin,  are  permissible,  but  not  Milan  or  Baden. 

19.  In  cases  where  an  indication  of  origin  is  required,  the  gen- 
eral rule  is  that  the  indication  must  be  shown  in  letters  as  large 
and  conspicuous  as  any  letter  in  the  name,  trade  mark  or  false 
description ;  it  must  be  in  the  same  language  and  character,  and  it 
must  accompany  every  application  of  the  name,  trade  mark  or 
false  description. 

The  size  of  the  letters  need  not  be  rigidly  insisted  upon,  pro- 
vided that  they  are  sufficiently  conspicuous  to  catch  the  eye  along 
with  the  name  or  trade  mark. 

The  counter-indication  should  be  adjacent  on  the  same  label,  or 
part  of  the  covering  or  goods,  as  the  case  may  be,  to  which  the 
name,  trade  mark  or  false  trade  description  is  applied :  it  should 
not  be  on  a  separate  label,  nor  otherwise  detachable  from  the  ap- 
plication of  the  name,  trade  mark  or  false  trade  description  itself; 
and  it  should  be  applied  no  less  indelibly  than  the  latter.  It 
should  be  repeated  for  all  applications  of  the  name,  trade  mark  or 
false  trade  description  except  when  the  latter  are  reproduced  in 
such  close  proximity  that  one  prominent  counter-indication  will 
suffice  to  cover  all ;  and  if  different  languages  or  characters,  Eng- 
lish or  Indian,  are  used  for  the  names  or  included  in  the  trade 
marks,  the  counter-indication  should  be  repeated  in  each  language 
employed. 

20.  Customs  officers  should  require  the  indication  of  the  country 
of  origin  to  be  placed  on  the  capsules  and  corks,  as  well  as  on  the 
labels,  of  bottles  of  wine  or  other  liquor  produced  or  made  beyond 
the  limits  of  the  United  Kingdom  or  of  British  India  whenever 
such  goods  are 

(a)  so  described, 

(b)  or  have  applied  to  them  British  or  British  Indian  names 

or  trade  marks  in  such  a  manner, 
as  to  indicate  or  suggest  that  the  wine  or  other  liquor  was  pro- 
duced or  made  in  the  United  Kingdom  or  in  British  India. 

Note. — Rules  21  to  24  below  apply  only  to  goods  falling  under 
class  (a)  of  Rule  10. 

21.  The  legal  provision  requiring  that  the  name  or  trade  mark 
of  a  British  Indian  or  English  manufacturer,  dealer  or  trader, 
when  applied  to  goods  not  made  in  the  United  Kingdom  or  Brit- 


438 


TRADING  WITH  ASIA 


ish  India,  should  be  accompanied  by  a  counter-indication,  is  not 
to  be  enforced  in  the  case  of 

(a)  Indian  produce  and  manufactures  imported  by  sea  from 
foreign  Indian  ports  into  British  India,  and  bearing 
the  name  or  trade  mark  of  a  British  Indian  trader  or 
dealer. 
(6)  Goods  bearing  the  name  or  trade  mark  of  a  British  In- 
dian trader  or  dealer  which  are  known  or  proved  to 
be.the  produce  of  Africa,  Arabia,  Persia,  or  Turkey  in 
Asia,  with  the  exception  of  manufactured  articles  such 
as  carpets,  earthenware,  shawls  and  silktm  or  woollen 
goods.     A  list  of  such  goods  will  be  found  in  Appen- 
dix C. 
The  Local  Governments  are  authorised  to  make  additions  to  the 
list  if  and  when  it  is  found  defective,  but  such  additions  are  to  be 
reported  for  the  information  of  the  Government  of  India. 

(c)  Coverings  or  labels  [as  defined  in  section  5  (3)  of  the 
Indian  Merchandise  Marks  Act]   made  in  a  foreign 
country  bearing  the  name  of  a  British  Indian  manu- 
facturer, dealer  or  trader,  where  the  name  is  intended 
to  refer  not  to  the  covering  or  label,  but  to  the  goods 
to  be  covered  or  labelled,  and  is  tlie  name  of  a  firm 
who  have  ordered  the  covering  for  their  own  goods. 
Examples. — Cardboard  boxes  made  in  Germany  bearing  the 
name,  trade  mark  or  advertisement  of,  and  imported  by,  a  British 
Indian  Soap  Manufacturing  Company  to  hold  soap  of  their  own 
manufacture;  labels  made  outside  the  United  Kingdom  or  British 
India  bearing  the  name  of,  and  imported  by,  a  British  Indian 
chemist  to  be  attached  to  phials,  boxes,  etc.,  for  dispensing  pur- 
poses; photograph  mounts  made  in  a  foreign  country  bearing  the 
name  and  imported  by  a  photographer  in  British  India  to  be  at- 
tached to  his  own  photographs. 

22.  Initials  of  manufacturers,  dealers  or  traders  in  the  United 
Kingdom  or  British  India  should  not  be  treated  as  names  requir- 
ing a  counter-indication  of  the  country  of  origin,  unless  they  are 
so  extensively  known  in  India  as  to  be  indistinguishable  in  effect 
from  the  full  names  which  they  represent,  or  are  followed  by 
affixes  distinctly  suggesting  a  British  firm  as  "&  Co."  (in  the  case 
of  goods  from  Continental  countries  except  Germany)  and 
''Brothers"  and  "Bros." 

23.  If  a  manufacturer  has  a  factory  in  a  foreign  country  as 
well  as  in  the  United  Kingdom  or  British  India,  his  name  or  trade 


INDIAN  MERCHANDISE  MARKS  MANUAL       439 

mark  requires  a  counter-indication,  when  applied  to  goods  made 
in  the  foreign  country.  If  a  manufacturer  having  a  factory  be- 
yond the  limits  of  the  United  Kingdom  or  British  India  has  only 
an  agency  or  place  of  business  within  such  limits,  his  name  or 
trade  mark  of  course  requires  a  counter-indication  whenever  ap- 
plied. 

24.  Such  expressions  as  "imported  by,"  "for  sale  by,"  "bottled 
by,"  and  the  like  accompanying  the  names  of  British  or  British 
Indian  dealers  or  traders  do  not  render  counter-indications  less 
obligatory  under  the  law  although  in  connection  with  the  general 
circumstances  of  a  case  they  may  justify  relaxation  of  the  pro- 
visions applicable. 

Note. — Rules*  25  to  37  below  apply  to  goods  falling  under  clauses 
(&)  and  (c)  of  Rule  10. 

25.  In  these  cases  the  offence  consists  in  the  use  of  false  trade 
descriptions  indicating  that  the  goods  are  .the  produce  or  manufac- 
ture of  a  country  in  which  they  were  not  produced  or  manufac- 
tured. 

26.  A  false  trade  description  is  defined  in  section  2  (3)  of  the 
Indian  Merchandise  Marks  Act.  It  comprises  any  description, 
statement  or  other  indication  (including  any  numeral,  word  or 
mark  which  according  to  the  custom  of  trade  is  commonly  taken 
to  be  an  indication)  that  the  goods  to  which  they  are  applied  were 
made  or  produced  in  one  country  when  such  goods  were  really 
made  or  produced  in  another. 

27.  It  is  ruled  by  section  19 A  (3)  of  the  Sea  Customs  Act  that 
when  any  name  on  goods  is  identical  with,  or  a  colourable  imita- 
tion of,  the  name  of  a  place  in  the  United  Kingdom  or  British 
India,  that  name,  unless  accompanied  in  equally  large  and  con- 
spicuous letters,  and  in  the  same  language  and  character,  by  the 
name  of  the  country  in  which  such  place  is  situate,  is  to  be  treated 
as  if  it  were  the  name  of  a  place  in  the  United  Kingdom  or  Brit- 
ish India. 

Example. — Boston,  in  Massachusetts,  should  be  accompanied  by 
the  name  "United  States,"  or  by  the  initials  "U.  S.  A."  or  by  the 
word  "Massachusetts." 

28.  A  trade  description  which,  in  indicating  a  particular  class 
of  goods  or  method  of  manufacture,  includes  the  name  of  a  place, 
is  to  be  held  as  naming  such  a  place  or  country.  Such  ex- 
pressions as  "Kidderminster  carpets,"  "Portland  cement,"  "Egyp- 
tian   cigarettes,"    "Balbriggan"    on    hosiery,    "Windsor    soap," 


't 


III 


440 


TRADING  WITH  ASIA 


"Shetland,"  or  "Amritsar**  on  shawls,  or  "Conjeevaram  cloth," 
though  they  might  be  held  to  be  merely  phrases  descriptive  of 
method  of  manufacture,  are  yet  calculated  to  mislead  as  to  place 
of  origin  and  require  counter-indications  when  applied  to  goods 
made  or  produced  in  countries  other  than  those  in  which  the 
places  are  situated.  Similarly  counter-indications  are  required  on 
wine,  not  the  produce  of  Portugal  or  Spain  and  described  re- 
spectively as  "Port"  or  "Sherry"  (which  wqrda  include  the  names 
of  the  places  Oporto  and  Xeres) ;  on  brandy  not  produced  in 
France  and  described  as  cognac  (which  indicates  production  in 
France) ;  on  liquors  not  produced  in  France  and  described  as 
"Chartreuse,"  "Benedictine"  (which  indicate  production  at  par- 
ticular places  in  France) ;  on  beer  produced  in  England  de- 
scribed as  "Munich  Beer"  (which  indicates  production  in  Ger- 
many). Where,  however,  as  in  the  case  of  "Lancashire  Swedish" 
on  Swedish  iron,  the  qualifying  word  follows  the  misleading  name, 
the  description  may  be  admitted. 

An  exception  must  be  made  where  such  a  description  has  be- 
come associated,  as  in  the  case  of  "Russian  leather"  with  a  partic- 
ular class  of  goods  in  a  manner  practically  to  preclude  any  prob- 
ability of  deception. 

29.  The  use  in  a  trade  description  of  a  language  which  is  not 
the  language  of  the  country  in  which  the  goods  were  made  or  pro- 
duced usually  requires  counter-indication.  An  exception  may  bo 
allowed  in  cases  in  which  a  particular  language  is  so  commonly 
applied  to  certain  goods  by  the  custom  of  the  trade  that  there  is 
no  reasonable  likelihood  of  the  consumer  in  India  being  misled. 
Thus  Spanish  words  applied  only  to  colour,  shape,  size  and  the 
like,  such  as  Reina,  Fina,  and  Claro  on  the  bands  and  boxes  of 
German-made  cigars,  may  be  admitted  without*  counter-indica- 
tions, but  any  further  indications  of  Havannah  or  other  make, 
not  being  German,  on  the  boxes  should  have  a  counter-indication 
a'pplied  to  them. 

30.  The  use  of  the  English  language  in  a  trade  description  ap- 
plied to  goods  not  made  in  tiie  United  Kingdom  or  a  British  Col- 
ony is  in  itself  to  be  regarded  as  indicatives  of  British  origin. 
This  rule  applies  not  merely  to  cases  in  which  English  words  are 
used  as  trade  descriptions,  but  extends  to  the  use  of  descriptive 
terms  or  fancy  names  such  as  extra  quality,  gold  medal,  lever 
locks,  bull-dog  (on  revolvers)  and  the  like.  The  fact  that  words 
used  in  the  English  language  are  common  to  other  languages  also, 
such  as  Phoenix,  Sardar,  extra,  patent,  does  not  make  counter- 


INDIAN  MERCHANDISE  MARKS  MANUAL      441 

indications  less  necessary  in  India  where  other  languages  than 
English  or  Indian  are  not  generally  known. 

Note. — In  the  case  of  American  goods  bearing  English  words  or 
descriptions,  a  counter-indication  of  origin  should  be  required. 

31.  No  counter-indication  is  required  on  marks  consisting  of 
English  letters  only,  provided  that  they  do  not  form  words  or  a 
trade  mark,  or  represent  any  initials  so  extensively  known  as  to 
require  a  counter-indication  under  rule  22  above,  or  amount  to  a 
trade  description.  Thus  a  counter-indication  is  not  required  for 
letters  such  as  K.  S.  on  copper,  which  convey  no  indication  of 
British  origin,  although  it  would  be  needed  for  letters  commonly 
used  in  the  United  Kingdom  to  indicate  description  or  quality,  as 
described  in  rule  29. 

32.  The  use  of  the  English  language  on  foreign  made  goods  is 
admissible  as  parts  of  the  goods  themselves. 

Examples. — English  verses  and  texts  on  'Xmas  and  birthday 
cards;  words  such  as  "Photographs"  and  "Stamps"  on  albums; 
"Tobacco"  on  pouches;  "Gold,"  "Silver,"  "Stamps"  on  the  divi- 
sions of  a  purse;  the  names  of  hotels  or  purveyors  on  crockeiy 
intended  for  use  by  the  establishments  or  firms  whose  names  it 
bears ;  "Fast,"  "Slow,"  on  regulators  of  Swiss  watches ;  regulating 
words  such  as  "Blood  Heat,"  "Boiling,"  "Freezing,"  on  thermom- 
eters,.or  "Fair,"  "Rain,"  etc.,  on  barometers;  Christian  names  on 
handkerchiefs.  The  use  on  such  goods,  however,  of  names  of 
makers,  publishers,  or  dealers  in  this  country,  or  of  any  descrip- 
tion of  the  goods  or  address  which  would  in  any  way  suggest 
English  origin,  will  involve  detention.  Expressions  such  as 
"Think  of  me,"  "For  a  good  boy,"  on  foreign  goods  must  bear  a 
statement  of  foreign  origin. 

33.  Words  in  any  Indian  language,  or  letters  or  numerals  in 
Indian  character,  or  marks  or  devices,  such  as  representations  of 
Indian  deities  or  emblems,  which  are  reasonably  calculated  to  lead 
persons  to  believe  that  the  goods  were  made  or  produced  in  Brit- 
ish India  require  counter-indications  on  the  same  principle  when 
applied  to  goods  made  or  produced  beyond  the  limits  of  British 
India. 

Note. —  ( 1 )  An-  indication  of  the  country  of  origin  should  not  be 
insisted  on  when  the  only  vernacular  characters  employed  are  the 
equivalent  of  numerals  used  as  quality  numbers. 

(2)  British  goods,  e.g.,  piece-goods,  bearing  trade  descriptions  such 
as  "Very  good  quality,"  "Best  cloth,"  "Very  best  borders,"  "Fast  col- 
our," etc.,  in  vernacular  characters,  or  bearing  tickets  with  represen- 


11 


442 


TRADIJja  WITH  ASIA 


lliiii  } 


tat  ion  8  of  Indian  deities  and  mythological  scenee  with  their  names  in 
vernacular  characters,  in  conjunction  with  the  name  or  trade  mark  of 
a  British  or  British  Indian  firm,  should  be  passed  without  any 
counter- indication  of  origin.  Such  counter-indications  should  be  in- 
sisted on  only  where  such  expressions  as  "Swadeshi,"  "Bande  Ma- 
taram,"  "Cawnpore  shoes,"  etc.,  are  used,  which  apart  from  being  in 
a  vernacular  character  definitely  indicate  from  their  meaning  that 
the  goods  were  manufactured  in  India. 

(3)  No  objection  should  ordinarily  be  taken  to  the  application  of 
tickets  or  designs  represeiJting  Indian  deities  or  emblems  to  British 
goods  even  when  the  name  of  the  trader  or  the  country  of  origin  is 
not  marked  on  such  tickets  or  the  goods.  In  particular  cases,  how- 
ever, when  there  is  good  ground  for  considering  that  the  use  of  such 
plain  tickets  or  designs  is  specially  designed  to  convey,  and  does  in 
fact  convey,  the  impression  of  Indian  origin,  they  should  be  consid- 
ered to  be  false  trade  descriptions.  In  deciding  whether  the  use  of  a 
plain  ticket  or  design  constitutes  a  false  trade  description,  regard 
should  be  had  inter  alia  to  priority  of  usage.  For  example,  the  sub- 
sequent application  to  British  piece-goods  of  a  ticket  or  design  which 
has  by  usage  become  associated  in  the  minds  of  dealers  or  consumers 
with  Indian  goods  of  a  similar  description  should,  in  the  absence  of 
some  counter-indication  of  British  origin,  be  objected  to;  but  a  ticket 
or  design  previously  associated  with  British  piece-goods  should  not 
be  objected  to  as  indicative  of  Indian  origin  notwithstanding  the 
later  use  of  a  similar  ticket  or  design  on  goods  of  like  description  of 
Indian  manufacture. 

34.  The  use  of  ther  language  of  one  foreign  country  on  goods 
produced  in  another  must  be  dealt  with  similarly. 

Examples. — Chinese  characters  applied  to  French  silk;  French 
descriptions  applied  to  German  brandy  and  on  German  scents; 
Bussian  descriptions  on  French  Kummel. 

35.  The  same  principles  should  be  applied  to  indications  other 
than  words — such  as  pictures,  pictorial  indications  suggesting  a 
false  origin. 

Examples. — Counter-indications  are  required  on  foreign  made 
goods  bearing  the  British  Royal  Arms;  on  bottled  Whisky  made 
in  Germany  bearing  the  picture  of  a  Highland  gillie;  on  gold  and 
silver  goods  made  abroad  bearing  British  assay  marks;  on  bags  of 
sugar  bearing  letters  commonly  used  in  the  United  Kingdom  as 
indicative  of  description  of  quality. 

36.  The  use  of  the  name  of  a  port  or  place  of  destination  on 
mere  packing  cases  or  outer  wrappers  in  which  goods  are  clearly 
not  intended  to  be  sold  or  exposed  for  sale,  or,  if  exposed  for 
sale,  then  in  an  export  market,  will  not  involve  detention.  Ad- 
dress marks,  when  they  are  merely  and  manifestly  such  for  pur- 
poses of  carriage  only,  are  not  to  be  treated  as  subject  to  the 
provisions  of  the  Act. 


INDIAN  MERCHANDISE  MARKS  MANUAL      443 

(2)  Statements,  descriptions  or  numerals  on  labels  or  tickets 
applied  to  boxes,  cartons,  parcels,  or  other  packages,  which  are 
manifestly  intended  only  for  the  purpose  of  identifying  articles 
for  the  convenience  of  dealers  and  shopkeepers,  and  are  not  spe- 
cially intended  to  attract  the  eye  of  the  purchaser,  are  not  to  be 
treated  as  trade  descriptions. 

Examples. — On  bundles  of  hosiery,  ''hose  brown  merino,  size 
10";  on  shoes,  "enamelled  leather,  men's  No.  6";  on  hats,  "brown 
felt,  hard.  No.  7." 

This  instruction  does  not  apply  to  a  mark  or  description  on  the 
goods  themselves,  nor  to  a  description  of  quality,  nor  to  a  descrip- 
tion containing  the  name  of  a  place,  country,  manufacturer  or 
trader,  nor  to  a  trade  mark. 

37.  When  labels,  capsules  or  the  like  are  imported  bearing 
trade  descriptions  of  wines  or  liquors,  and  there  is  reasonable 
ground  to  believe  that  they  will  be  applied  to  wines  or  liquors 
separately  imported  after  passing  the  Custom  House,  and  that 
when  so  applied  they  will  amount  to  false  trade  descriptions, 
intimation  should  be  sent  to  the  Chief  Excise  authorities  at  the 
port  of  importation,  in  order  that  they  may  take  steps  to  pre- 
vent goods  bearing  such  false  descriptions  from  passing  into  con- 
sumption. 

C. — Goods  having  applied  to  them  false  trade  descriptions  that 
are  false  in  other  respects, 

38.  This  class  includes  goods  having  applied  to  them  trade 
descriptions  that  are  false  in  respect  of 

(1)  the  number,  quantity,  measure,  gauge  or  weight  of  the 

goods,  or 

(2)  the  time  at  which  they  were  made  or  produced,  or 

(3)  the  mode  of  manufacture  or  production,  or 

(4)  the  material  of  which  the  goods  are  composed,  or 

(5)  in  respect  of  the  goods  being  the  subject  of  an  existing 

patent  or  copyright. 
It  will  be  observed  that  a  description  of  quality  is  not  covered 
by  this  definition.  Thus  statements  that  goods  are  hand-made 
when  they  are  actually  machine-made,  or  that  they  measure  25 
yards  when  they  only  measure  22,  or  that  bottles  have  a  capacity 
of  2  oz.  when  they  have  not  that  capacity,  are  false  trade  descrip- 
tions, but  not,  for  instance,  statements  that  a  thermometer  meas- 
ures temperature  in  1  minute  when  it  really  requires  5,  or  that  a 


l\ 


I' 


w  t 


444 


TRADING  WITH  ASIA 


Hi 


common  watch  is  a  chronometer,  or  which  relate  otherwise  to  the 
quality  of  goods. 

Customs  officers  will  detain  goods  falling  under  this  class  of 
their  own  motion. 

The  most  important  cases  in  the  class  affect  yam  and  piece- 
goods  in  respect  of  their  measure,  etc.,  under  clause  (1)  and  cer- 
tain other  goods  in  respect  of  the  material  of  which  they  are 
composed  under  clause  (4). 

39.  The  standard  of  measure  for  yam  is  the  relation  of  length 
to  weight,  which  is  known  as  the  count.  The  chief  systems  of 
count  are  (1)  the  British  and  (2)  the  metric. 

(1)  The  British  count  may  be  defined  as  the  number  of 

hanks  of  a  given  yam  that  weigh  1  lb.  avoirdupois, 
equivalent  to  the  number  of  yards  that  weigh  8-3 
grains.  The  hank  is  840  yards  in  length,  and  includes 
7  leas  of  120  yards  each.  The  unit  of  count  is  1 
hank  to  1  lb.,  equivalent  to  840  yards  to  7,000  grains, 
or  1  yard  to  8-3  grains.  The  last  formula  is  useful 
for  calculating  odd  lengths. 
The  number  of  the  count  becomes  higher  in  proportion  as  the 
length  increases  in  relation  to  the  weight.  Thus  if  2 
hanks  go  to  1  lb.,  or  2  yards  to  8  3  grains,  the  yam  is 
of  count  No.  2  commonly  described  as  2s.  Similarly 
if  20  hanks  weigh  1  lb.,  or  20  yards  8  3  grains,  the 
yam  is  20s. 

(2)  The  metric  count  for  all  yam,  with  the  exception  of 

raw  and  prepared  silk,  represents  a  relation  between 
metres  and  grammes.  Is  being  1,000  metres  to  500 
grammes,  or  2  metres  to  1  gramme,  equivalent  to  1 
yard  to  7  0553  grains.  Then  length  of  the  hank  is 
fixed  at  1,000  metres.  Thus  20s  by  this  count  repre- 
sents yam  weighing  40  metres  to  the  granune,  or  40 
hanks  of  1,000  metres  to  500  grammes. 
The  one  system  may  be  counted  into  the  other  by  the  following 
formula : 

The   English   yarn   No.  X  0847  =  the   metric   No. 
The   metric   yarn   No.  X  1-181  =  the   English    No. 

For  raw  and  prepared  silk,  on  the  other  hand,  the  count  is  the 
number  of  grammes  weight  in  10,000  metres.  Thus  20s  repre- 
sents yam  of  which  10,000  metres  weigh  20  grammes. 

40.  If  yam  is  imported  marked  with  the  metric  count,  the 


INDIAN  MERCHANDISE  MARKS  MANUAL       445 

marking  should  be  accompanied  by  the  words  '^metric  count,"  or 
other  definite  indication  that  it  is  packed  on  the  metric  system,  as 
well  as  by  the  necessary  indication  of  foreign  manufacture  if  it 
has  been  manufactured  beyond  the  limits  of  the  United  Kingdom 
or  British  India.  These  indications  sliould  be  conspicuous  and 
accompany  every  application  of  the  count. 

41.  Yam  is  ordinarily  made  up  in  5  or  10-lb.  bundles  contain- 
ing a  certain  number  of  knots,  which  in  turn  contain  a  certain 
number  of  hanks;  and,  as  contemplated  in  paragraphs  III  to  V 
of  Notification  No.  1474,  as  subsequently  amended,  reproduced  in 
Part  II,  there  is  or  should  be  a  definite  relation  between  the 
number  of  knots  in  a  bundle  and  the  count.  Thus  in  a  10-lb. 
bundle  in  which  there  are  10  hanks  to  the  knot,  the  number  of 
knots  is,  or  should  be,  the  same  as  the  number  of  the  count.  Sim- 
ilarly, if  such  a  bundle  is  made  up  with  20  hanks  to  the  knot,  the 
number  of  the  latter  is,  or  should  be,  half  the  number  of  the 
count,  and  so  on.  But  such  a  make  up  does  not  of  itself  amount 
to  a  trade  description  of  the  count:  to  constitute  the  latter,  as 
mentioned  in  rule  2  above,  there  must  be  a  description  or  state- 
ment applied  to  the  yarn,  or  an  indication,  direct  or  indirect,  of 
the  nature  of  a  description  or  statement,  including  the  use  of  any 
numeral,  word  or  mark  which  according  to  the  custom  of  the  trade 
is  commonly  taken  to  be  an  indication  of  the  count.  Thus  the 
mark  "20s"  applied  to  the  wrapper  of  a  bundle  of  yam  indicates 
that  the  count  is  20,  and  in  the  absence  of  the  words  "metric 
count"  or  other  definite  indication  that  the  yam  is  measured  on 
the  metric  system,  should  be  regarded  as  indicating  further  that  it 
is  measured  by  the  British  system. 

42.  Paragraphs  6  to  10  of  Notification  No.  1430  of  the  6th 
April,  1891,  as  subsequently  amended,  reproduced  in  Part  II, 
describe  the  conditions  under  which  a  teat  of  yam  may  be  under- 
taken and  the  method  of  the  test,  and  paragraphs  III  to  V  of 
Notification  No.  1474  of  the  13th  November,  1891,  as  subse- 
quently amended,  reproduced  in  the  same,  declare  what  variations 
from  the  described  length,  weight,  or  count  make  trade  descrip- 
tions false  in  a  material  respect. 

In  the  case  of  Berlin  wool,  a  trade  description  which  shows  an 
error  in  weight  of  less  than  4  per  cent,  should  not  ordinarily  be 
held  to  be  false  in  a  material  respect,  and,  in  the  absence  of  any 
other  reasons  for  suspecting  fraud,  consignments  of  this  wool 
which  show  a  shortage  in  weight  of  less  than  4  per  cent  may  be 
passed  without  a  penalty  after  requiring  the  importers  to  removt 


f^i 


446 


TRADING  WITH  ASIA 


I 


the  original  marks  and  to  stamp  the  packets  with  the  correct 
weight  as  ascertained  in  the  Custom  House.  If,  however,  it  is 
found  that  this  concession  is  being  systematically  taken  advan- 
tage of,  the  importers  concerned  should  be  warned  that  they  are 
liable  to  fine  which  will  be  imposed  if  deficiencies  in  weight  are 
observed  to  be  habitual. 

43.  For  testing  yam  the  appliances  chiefly  required  include  a 
scale  weighing  up  to  one-tenth  of  a  grain,  a  wrap-reel,  a  swift 
and  a  stove  for  applying  the  stove  test.  These  appliances  should 
be  the  same  as  those  used  in  the  testing  house  of  the  Manchester 
Chamber  of  Commerce,  and  may  be  obtained  on  indent  through 
the  Local  Governments.  The  instructions  in  the  explanatory 
pamphlet  issued  by  the  Manchester  Chamber  of  Commerce  to 
accompany  the  reel  should  be  carefully  observed. 

44.  The  stove  test  need  only  be  applied  in  cases  in  which 
weighment  by  the  ordinary  methods  show  the  weight  of  the  yam 
to  be  short,  or  in  which  the  feel  and  appearance  of  yarn  indicate 
that  it  is  abnormally  moist  or  over-conditioned,  or  in  whicli  the 
importer  demands  the  test.  A  fee  of  Rs.  5  (five)  will  be  levied 
from  an  importer  demanding  the  test,  but  will  be  refunded  if  the 
test  fails  to  support  the  original  determination  of  count  and 
length  by  the  Customs  officers.  If  more  than  one  application  of 
the  test  is  demanded,  a  further  fee  of  Rs.  5  will  be  levied  for  each 
fresh  test,  the  whole  sum  charged  being  retained  or  refunded 
according  to  the  final  result. 

The  conditioning  of  yam  is  the  term  applied  to  the  quantity  of 
moisture  a  given  yam  contains. 

Under  the  stove  test  yam  is  reduced  to  an  absolutely  dry  con- 
dition and  then  weighed.  In  the  case  of  cotton  yam  a  regain  of 
SVo  per  cent  is  next  added,  and  the  figure  obtamed  is  regarded  as 
the  actual  weight  under  normal  conditioning  to  be  adopted  for  the 
purposes  of  determining  whether  a  given  length  of  yam  is  of 
full  or  short  weight.  For  the  regains  to  be  allowed  in  the  case 
of  silk,  or  woollen,  or  other  yams,  a  reference  may  be  made  to  the 
tables  of  official  standards  supplied  with  tht«  stove  test  appa- 
ratus. 

45.  The  following  is  an  example  of  the  calculation  to  be  made 
in  respect  of  any  hank  tested  in  verifying  the  count  of  cotton 
yam  under  these  rules: 


Declared  count 

Weight  of  hank  on  being  taken  out  of  bundle 
Length  of  hank  ascertained   by   reeling    . 


80 

850     grains. 
820      yards. 


INDIAN  MERCHANDISE  MARKS  MANUAL      447 

Weight  after  application  of  stove  test 220     grains. 

Regain  at  8V^  per  cent 18.7 

Weight  in  corrected  condition 238.7       '* 

820                 820  X  100 
Count  in  original  condition  X  8.3  = 27.3 

250  100  X  12 

820 

Count   in   corrected   condition   X  8.3        .      .      .     28.63 

238 

Difference  from  count  declared 1.37 

Percentage  of  difference  from  count  declared  .     .     .       4.ft 

The  length  of  the  hank  tested  is  thus  short  by  20  yards,  but 
the  difference  of  count  is  within  the  5  per  cent  margin  allowed  by 
Notification  No.  1474  of  the  13th  November,  1891,  as  subse- 
quently amended. 

46.  Trade  descriptions  of  measure  and  the  like  applied  to 
piece-goods  include  (1)  the  descriptions  of  length  stamped  on  cer- 
tain cotton  and  woollen  goods  in  accordance  with  clause  (/),  sec- 
tion 18,  of  the  Sea  Customs  Act,  in  respect  of  which  rules  56  to 
58  below  may  be  consulted;  and  (2)  other  trade  descriptions  of 
number,  measure,  or  weight  applied  to  the  above  or  any  other 
piece-goods.  Paragraph  4  of  Notification  No.  1430  of  the  6th 
April,  1891,  as  subsequently  amended,  limits  the  occasions  on 
which  descriptions  of  length  should  be  tested,  and  paragraphs  I 
and  II  of  Notification  No.  1474  of  the  13th  November,  1891,  as 
subsequently  amended,  prescribe  the  limits  of  variation  beyond 
which  descriptions,  whether  of  length  or  width,  on  certain  chief 
classes  of  piece-goods  are  to  be  deemed  false  in  a  material 
respect. 

47.  In  testing  for  length  the  measurement  should  be  made  along 
the  selvage.  In  testing  for  width  the  cloth  should  be  measured  by 
each  of  the  following  methods, — the  mean  of  the  measurements 
so  taken  being  adopted — and  care  should  be  exercised  in  applying 
each  method  to  select  a  portion  of  the  cloth  where  the  creases  are 
fewest,  and  the  warp  and  weft  respectively  as  straight  as  pos- 
sible : 

(1)  A  double-fold  of  the  cloth  should  be  laid  on  the  table 
and  the  creases  stroked  out,  so  that  it  may  lie  per- 
fectly flat.  The  measuring  rod  should  then  be 
placed  across  the  cloth,  and  the  finger  and  thumb  run 
down  the  rod  on  each  side  of  it  across  the  cloth  so  as 
to  once  more  flatten  the  creases.  Care  should  be 
taken  in  doing  this  to  see  that  whilst  the  creases  are 


443 


TRADING  WITH  ASIA 


smoothed  out,  stretching  is  avoided  and  the  warp 
threads  remain  per|)endicular  to  the  rod.  The  meas- 
urement should  then  be  recorded. 
(2)  A  fold  of  the  cloth  should  be  taken,  and  the  doubled 
edge  held  between  a  finger  and  thumb  at  each  end, 
and  extended  over  the  measuring  rod  which  should  be 
flat  on  the  table.  The  extension  should  be  suflBcient 
to  remove  the  creases,  but  not  to  stretch  the  warp  out 
of  the  perpendicular. 

48.  In  taking  these  measurements  the  peculiarities  of  the  cloth 
under  measure  should  not  be  lost  sight  of.  Thus  cloths,  like  grey 
shirtings,  that  are  pressed  but  not  folded  gain  slightly,  but  by 
no  means  uniformly,  in  breadth  in  the  course  of  pressing;  whilst 
those  that  are  folded,  like  mulls,  lose  in  the  folding  more  than 
they  gain  in  the  pressing.  These  effects  again  are  apt  to  dis- 
appear with  goods  that  have  been  opened  and  handled  in  a  shop. 
Loose  cloths  like  mulls,  especially  if  shrunk  in  the  course  of 
manufacture,  are  naturally  liable  to  bag  and  stretch  more  than 
others,  and  owing  to  their  flirasiness  it  is  difficult  to  apply  the 
first  method  of  measurement  satisfactorily:  such  cloths  also  are 
liable  to  drag  in  the  weaving  towards  the  end  of  a  long  piece,  and 
the  folds  will  sometimes  not  coincide  with  the  weft.  Due  allow- 
ances should  be  made  for  these  characteristics.  If  it  is  found 
difficult  to  determine  a  reasonable  degree  of  tension  for  purposes 
of  measurement,  the  mean  between  stretching  to  the  full,  and  not 
stretching,  may  afford  the  best  guide. 

The  influence  of  stretching  for  length  on  the  width  has  always 
to  be  taken  into  account.  A  semi-circular  appearance  in  the 
selvage  across  the  end  of  a  piece  will  show  that  the  cloth  has 
been  stretched  lengthwise  in  the  making,  in  which  case  it  must 
lose  in  length  as  the  weft  is  straightened  to  measure  the  width. 
It  may  then  have  to  be  ascertained  whether  the  trade  description 
of  length  does  not  become  false  in  the  process  of  making  that  for 
width  correct.  To  ascertain  this  a  measurement  along  the  sel- 
vages both  lengthwise  and  across  may  be  the  best  guide. 

49.  (1)  In  the  case  of  (a)  wliite  zinc,  red  lead,  white  lead  and 
similar  substances,  (h)  linseed  oil  and  (c)  turpentine,  which  are 
described  as  such,  no  qualifying  description  need  be  required 
when  the  percentage  of  impurities  is  less  than  6  per  cent. 

(2)  When  the  percentage  of  impurities  exceeds  5,  but  is  less 
than  50,  an  adequate  qualifying  description  such  as  "adulterated*' 
or  "reduced"  should  be  required. 


INDIAN  MERCHANDISE  MARKS  MANUAL       449 

(3)  When  the  percentage  of  impurities  is  50  or  exceeds  50,  the 
actual  percentage  of  adulteration  must  be  marked  in  addition  to 
the  adequate  qualifying  description. 

The  marking  where  required  under  either  of  the  two  preceding 
clauses  should  be  conspicuous  and  accompany  every  application 
of  the  description. 

50.  (1)  In  the  case  of  white  zinc,  white  lead,  red  lead  and 
similar  substances,  the  adulteration  should  be  calculated  on  solid 
pigment  alone  and  not  on  the  solid  pigment  and  oil  together.  In 
the  case  of  these  articles,  a  margin  of  5  per  cent  may  be  allowed 
before  requiring  a  description  of  marking  already  applied  to  be 
altered.  For  example,  a  keg  of  red  lead  is  marked  50  per  cent 
reduced  and  the  chemical  analysis  shows  42  per  cent  red  lead,  8 
per  cent  oil  and  50  per  cent  other  matter.  According  to  this 
analysis  the  keg  should  be  marked  54  3  per  cent  reduced.  As, 
however,  the  difference  between  this  percentage  and  that  con- 
tained in  the  description  already  applied  is  less  than  5  per  cent, 
the  marking  need  not  be  objected  to. 

(2)  In  the  case  of  turpentine  this  margin  may  be  increased  to 
10  per  cent. 

51.  The  values  declared  for  linseed  oil,  turpentine,  white  lead, 
red  lead,  white  zinc,  and  similar  substances  afford  a  guide  to  the 
correctness  of  the  marking.  A  list  of  prices  should  therefore  be 
maintained  at  each  port  and  periodically  revised,  showing  the 
current  rates  for  these  goods  in  different  degrees  of  adulteration 
or  reduction.  For  goods  adulterated  to  the  extent  of  less  than  50 
per  cent,  samples  should  be  sent  for  chemical  analysis  when  the 
values  declared  are  materially  less  than  the  current  rates.  For 
goods  adulterated  to  the  extent  of  50  per  cent  or  more,  samples 
should  be  sent  in  all  cases.  But  when  any  white  lead,  red  lead, 
white  zinc  or  any  other  similar  substance  of  a  particular  manufac- 
ture has  by  previous  test  been  found  correct,  a  sample  need  not 
be  sent  for  analysis  on  every  subsequent  importation.  An  occa- 
sional test  will  in  such  cases  suffice. 

Goods  need  not  be  detained  pending  analysis,  unless  from  the 
invoice  or  otherwise  there  is  good  reason  to  believe  that  they  are 
marked  as  genuine  when  they  are  actually  reduced.  In  other 
cases  they  may  be  released  on  a  letter  of  guarantee  from  the 
importers  that  they  will  not  be  delivered  to  purchasers  without 
permission  of  the  Collector  or  Chief  Customs  Officer. 

52.  Descriptions  like  "Star  silver,"  "Art  silver,"  "Potosi  silver," 
"Aluminium  gold,"  "Arcadian  gold,"  "Real  gold  beads,"  and  the 


450 


TRADING  WITH  ASIA 


like,  when  applied  to  articles  not  made  of  silver  or  gold,  should 
be  treated  as  false  trade  descriptions.  "German  silver^'  and 
"Nickel  silver"  may,  however,  be  passed  without  objection  as  these 
descriptions  are  well  known  to  all  classes  likely  to  be  affected,  and 
have  been  in  use  for  a  sufl&ciently  long  period  to  render  it  im- 
probable that  a  purchaser  would  be  deceived  by  their  use.  No 
objection  should  be  taken  to  the  use  of  such  marks  as  "Potosi,^' 
"Nevada,"  etc.,  provided  the  words  "silver"  and  "gold"  are 
omitted. 

52A.  The  terms  such  as  "Superfine,"  "Spanish  stripes"  and 
"Flannel"  which  denote  pure  woollen  material  should  be  treated 
as  constituting  a  false  trade  description  when  used  in  connection 
with  mixed  or  cotton  fabrics  made  up  in  imitation  of  woollen 
goods  unless  accompanied  by  tlie  words  "Mixed"  or  "Cotton"  as 
a  counter-indication.  No  objection  should,  however,  be  taken  to 
the  application  of  the  term  "Merino"  to  hosiery  or  underwear 
made  of  cotton  and  wool  mixed,  or  of  the  term  "Velvet"  or 
"Velveteen"  to  material  made  wholly  or  in  part  of  cotton;  nor 
should  any  objection  be  taken  to  the  applicaticm  of  the  descrip- 
tion "All  wool"  on  woollen  hose  of  which  the  lieels  and  toes  are 
cotton  and  wool  mixed,  in  cases  in  which  the  amount  of  cotton 
used  is  inconsiderable  and  is  added  only  for  the  purposes  of 
strengthening  the  heels  and  toes. 

52B.  Uncondensed  milk  should  contain  3  per  cent  of  fat,  while 
condensed  milk  should  contain  at  least  9  per  cent  of  fat.  In  the 
case  of  condensed  milk  so  described  but  which  contains  less  than 
9  per  cent  of  fat,  an  adequate  qualifying  description  such  as 
"prepared  from  skimmed  milk"  should  be  required. 

Note, — The  percentage  of  fat  in  sweetened  condensed  milk  should 
be  calculated  on  the  whole  product,  as  in  the  case  of  unsweetened 
milk,  and  not  merely  on  the  actual  milk  constituents  of  the  product. 

53.  In  dealing  with  other  false  trade  descriptions  of  material, 
or  of  number,  quantity  measure,  etc.,  or  under  any  other  of  the 
subheads  specified  in  rule  38,  due  consideration  should  be  given 
to  the  provision  that  a  trade  description  to  be  false  must  be 
"untrue  in  a  material  respect." 

54.  When  any  indications  that  goods  are  of  a  certain  standard 
composition  accompany  their  descriptions  su(^li  as  the  letters 
B.  P.  (British  Pharmacopoeia)  in  the  case  of  drugs,  the  descrip- 
tion should  be  regarded  as  false  unless  the  ^composition  is  in 
accordance  with  the  standard.  The  letters  B.  P  ,  when  applied  to 
goods  made  outside  the  United  Kingdom  or  British  Possessions, 


INDIAN  MERCHANDISE  MARKS  MANUAL      451 

require  a  counter-indication  of  origin,  even  though  the  composi- 
tion of  the  goods  be  correct. 

55.  Descriptions  may  amount  to  false  trade  descriptions 
although  literally  true ;  thus  "Lavender  water,"  "Kananga  water," 
"Eau  de  Cologne"  and  "Florida  water,"  or  the  terms  "Extract," 
"Extrait,"  or  "Essence"  applied  to  an  imitation  of  scent  contain- 
ing no  spirit  would  amount  to  a  false  trade  description,  because 
spirit  is  one  of  the  ingredients  of  these  preparations  in  the  ordi- 
nary acceptation  of  these  terms.  Similarly  if  the  term  "Bon 
Bons"  were  applied,  in  the  Indian  market,  to  tablets  containing 
santonine  or  other  worm  medicine,  so  regularly  as  according  to 
the  custom  of  the  trade  to  be  commonly  taken  to  be  an  indication 
that  the  tablets  contained  this  drug,  they  would  amount  to  a  false 
trade  description  when  applied  to  goods  made  up  in  imitation  of 
such  tablets,  but  containing  none  of  the  medicine  in  question, 

D. — Piece-goods  which  have  not  the  length  properly  stamped  on 
each  piece. 

56.  The  importation  of  these  goods  is  prohibited  by  clause  (/), 
section  18,  of  the  Sea  Customs  Act.  The  prohibition  extends  to 
"piece-goods  such  as  are  ordinarily  sold  by  length  or  by  the 
piece,"  and  by  Notification  No.  1430,  dated  16th  April,  1891,  as 
subsequently  amended,  reproduced  under  Part  II,  these  are  defined 
as  including  woollen  goods,  that  is,  woollen  piece-goods  of  all 
kinds,  and  certain  specified  descriptions  of  cotton  goods.  The 
Notification  defines  the  conditions  under  which  goods  should  be 
examined  to  test  the  accuracy  of  the  stamping,  and  exempts  goods 
for  personal  use  in  the  terms  of  the  general  exemption  in  rule 
1(b), 

57.  Under  the  definition  quoted  goods  not  being  of  cotton  or 
woollen  material,  such  as  silk  and  velvet,  are  exempt.  Alpaca 
should  be  treated  as  wool,  and  cotton  mixed  with  silk,  or  wool 
mixed  with  silk,  as  cotton  and  woollen,  respectively,  provided  that 
the  cotton  or  wool  is  in  each  case  a  material  constituent  of  the 
fabric.  Shawls  and  blankets  whether  woollen  or  cotton  are  ex- 
eluded,  because  they  are  sold  by  the  unit  and  not  by  length  or  by 
the  piece,  whilst  handkerchiefs,  printed  or  plain,  do  not  fall  within 
the  cotton  goods  specified  for  the  reason  that  they  are  ordinarily 
sold  with  reference  to  the  number  of  handkerchiefs,  without  con- 
sideration of  the  measured  length  of  the  piece  in  which  they  are 
contained.  Fents,  which  comprise  small  pieces  of  cloth  that  are 
sold  by  weight,  are  also  exempt,  but  cut  lengths  so  long  as  they 


I 


452 


TRADING  WITH  ASIA 


are  still  sold  by  length  or  by  the  piece  should  be  marked  in  the 
manner  described  below.  Cotton  sarongs  when  imported  in 
lengths  greater  than  2^2  yards  should  be  stamped. 

In  addition  to  falling  within  the  descriptions  defined,  goods,  to 
be  liable  to  stamping,  must  have  been  manufactured  either 
beyond  the  limits  of  India,  or  if  in  India,  then  in  territories 
beyond  the  limits  of  British  India  and  on  premises  which,  if  in 
British  India,  would  be  a  factory  under  the  Factories  Act.  Thus 
goods  manufactured  in  a  factory  at  Bhavnagar,  one  of  the  Native 
States  of  Kathiawar,  might  be  liable,  whereas  those  manufac- 
tured on  a  handloom  in  the  same  place  would  be  exempt. 

68.  In  marking  the  length  the  stamping  of  numerals  only  is  in- 
sufficient; the  words  "yards"  or  "yds."  should  accompany  the  nu- 
merals, and  with  cut  lengths  or  pieces  of  the  kind  described  above, 
the  number  of  pieces  should  be  marked  as  well  as  the  yards  on 
the  front  or  outer  face  fold  of  the  cut  piece,  the  figures  being 
presented  in  a  way  to  show  clearly  what  they  are  intended  to 
40  yards  40  yards 

mean;  thus  would  not  suffice,  but  or  "40 

3  3  pieces 

yards,  3  pieces,"  or  the  like  would  meet  the  reciuirement. 

Note.— This  ruling  should  not  be  applied  to  ribbons,  cotton  em- 
broideries, laces,  trimmings  and  the  like,  which  are  not  piece-goods. 

The  length  must  be  in  standard  yards  or  fractions  of  a  yard, 
and  should  represent  the  actual  length  of  the  goods  aa  imported, 
and  not  the  length  before  shrinkage  or  dryage,  resulting  from 
processes  such  as  dyeing,  or  from  atmospheric  changes  which  can 
reasonably  be  foreseen.  Marking  in  inches  may  be  permitted 
on  cloths  of  small  dimensions  and  delicate  make  in  accordance 
with  the  custom  of  the  trade.  The  marking  should  be  such  as 
will  not  ordinarily  be  removable  except  by  washing  the  fabric,  or, 
in  the  case  of  goods  that  are  not  ordinarily  washed,  it  sliould  be  of 
such  a  nature  that  it  is  not  likely  to  be  obliterated  in  the  ordinary 
course  of  handling  before  the  goods  reach  the  purchaser.  Marks, 
which  are  stitched  on  the  fabric  and  are  easily  removable  by  cut- 
ting should  not  be  permitted. 

The  marking  should  be  cons])icuous,  in  a  different  colour  from 
that  of  the  fabric,  upon  the  fabric  itself,  not  upon  a  removable 
label  or  ticket,  and  in  a  conspicuous  place  upon  the  fabric.  It 
should  not  be  upon  an  inner  fold  which  cannot  readily  be  seen, 
nor  upon  a  wholly  detached  piece,  but  it  may  be  upon  a  piece 


INDIAN  MERCHANDISE  MARKS  MANUAL       453 

that  is  partly  detached  without  being  entirely  severed.  In  the 
case  of  sarongs  which  are  required  under  paragraph  57  to  be 
stamped,  the  stamping  may  be  permitted  on  the  selvage  in  the 
innerf old  instead  of  on  the  upper-most  fold  of  the  cloth. 


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INDEX 


Acids,  imports,  Ceylon,  284 
Acquisition  of  Philippines,  150 
Administrative         Conference, 

1913-1914,  40 
Agave  fiber,  production  and  ex- 
port, Philippines,  186 
Agra,  arrival  of  English,  224 
Agra  and  Oudh,  United  Prov- 
ince, area,  232 

—  population,  232 
Agrarian  policy  of  Japan,  88 
Agricultural    implements,    im- 
ports, India,  264 

—  trade,  Philippines,  200 
Agriculture,  development,  East 

India,  192 

• Korea,  101 

Aguinaldo,     continued     activ- 
ities, 171 

Ajmes-Merwara  Province,  area, 
232 

—  population,  232 
Albuquerque,     Alfonso,     con- 
quests, 222 

Alum,  export,  China,  82 
American  government  in  Phil- 
ippines, first,  173 
American    trade    with    China, 
1860,  26 

—  development,  in  Dutch  East 

Indies,  204 

—  future,  in  Philippines,  203 
Amoy  -  Changchow  Railroad, 

China,  131 

455 


Andamans  and  Nicobais  Prov- 
ince, area,  232 

—  population,  232 
Anglo-Japanese  Alliance,  67 
Antimony,  mines,  China,  81 

—  Production,  Japan,  93 
Apitong  trees,  Philippines,  188 
Area,  Agra  and  Oudh,  United 

Provinces,  232 

—  Andamans     and     Nicobais, 
232 

—  Ajmer-Merwara,  232 

—  Asia,  3 

—  Assam,  232 

—  Baluchistan,  5 

—  Bengal,  232 

—  Berar,  232 

—  Bihar  and  Orissa,  232 

—  Bombay  Province,  232 

—  British  India,  5 

—  Burma,  5 

—  Burma  Province,  232 

—  China,  5 

—  Coorg,  232 

—  Dutch  East  Indies,  5 

—  French  Indo-China,  5 

—  Japanese  Empire,  5 

—  Madras  Province,  232 

—  Malaya,  5 

—  Northwest  Provinces,  232 

—  Philippines,  5 

—  Punjab,  232 

—  Siam,  5 
Areca    nuts,    exports,    Ceylon, 

281 
Arts  and  crafts,  Japan,  98 


456 


INDEX 


,1 


'<    I 


i'-  i 


11 


't 


Assam  Province,  area,  232 
Asbestos,  China,  82 
Asia,  area,  5 

—  climate,  5 

—  population,  5 

Asiatic    Petroleum    Companv. 
197  ^ 

Automobiles,   imports,   Ceylon, 

284 
India,  266 

—  number  in  India,  267 


B 


Backwardness,  Oriental, 
causes,    2 

Bacon  and  hams,  imports,  In- 
dia, 266 

Baluchistan  Province,  area, 
232 

—  population,  232 

Banka,  Island,  Dutch  East  In- 
dies, 196 
Banking  systems,  Japan,  31 
Barley,  India,  export,  241 

—  production,   Japan,   88 
Korea,  102 

Battle  of  Concessions,  26 
Beans,  horse,  production,  Jap- 
an, 89 

—  imports,  Burma,  276 

—  and  peas,  imports,  Japan, 

121 

—  production,   Formosa,   107 

—  red,  production,  Japan,  89 

—  white,  production  and  ex- 

port, Burma,  270 
Beef,  fresh,   imports,  Philip- 
pines, 203 
Bencoolen,  founding,  291 
Bengal  Iron  and  Steel  Works, 
253 


Billiton,   Island,   Dutch   East 
Bengal  Province,  area,  232 

—  population,  232 
Benzine,  imports,  Mulaya,  304 
Berar  Province,  area,  232 

—  population,  232 
Beverages,   imports,   Sumatra 

East   Coast,    208 

Bihar    and    Orissa    Province, 
area,  232 

—  population,  232 
Indies,  196 

Biscuits   and   cakes,   imports, 
Burma,  276 

India,  266 

Boiler  imports,  India,  262 
Bombay  Province,  area,  232 

—  population,  232 

and  port,  239 

Boxer  indenmity,  27 

—  effect  on   Chinese  finance, 

125 

—  suspension,  49 
Boxer  rebellion,  27 

Bran  imports,  Malaya,  304 
Brewing  industry,  Japan,  98 
Bristles,  pig,  export,  China,  79 
British  India,  area,  5 

—  population,  5 
East  Indies,  159 

Bruce,    Mr.,    and    Treaty    of 

Tientsin,  1860,  24 
Brush  industry,  Japan,  100 
Buckwheat,  production,  Japan, 
89 

Budget  system,  French  Indo- 
British      occupation,      Dutch 

China,  308 
Building    materials,    importsi 

Japan,  120 
Burgos,     Philippine     patriot, 


INDEX 


457 


Burma,  area,  5 

—  population,  5 
Burma  Province,  area,  232 

—  population,  232 
Burmese  War,  with  Siam,  318 


Cabral,  221 

Cacao,  exports,  Ceylon,  280 

Calcutta,  population  and  port, 

239 
Calicut,  Portuguese  arrival  at, 

221 
Cambodia,    negotiations    with 

Siam,  320 
Camels'   hair,  export,   China, 

79 
Camphor,  production,   Form- 
osa, 108 
Cananare,  Portuguese  at,  222 
Canned  goods,  imports,  India, 

265 
Canned  milk,  imports,  Burma, 

276 
Canton  -  Hankow  -  Changsha 

Railroad,  China,  129 
Canton-Kowloon  Railroad, 

China,  130 
Canton   -    Samshui   Railroad, 

China,  131 
Canton-Shuchowfu    Railroad, 

China,  131 
Carabao,  in  the  Philippines, 

186 
Cardamon,    exports,    Ceylon, 

281 
Cassava  root,  Philippines,  181 
Caste  of  India,  239 
Castor  oil,   India   production 
and  trade,  250 


Castor  seed,  production,  Cey- 
lon, 281 

—  India,  production  and  trade, 
248 

Cattle,  number,  Japan,  92 
Korea,  103 

—  in  Philippines  186, 
Cattle-breeding,  China,  78 
Caustic  soda,  imports,  Japan, 

120 
Cavite,  revolt,  149 
Celluloid  manufacture,  Japan, 

99 
Cement,     imports,     Sumatra, 

East  Coast,  208 
Censorate,  Chinese,  37 
Ceylon,  early  settlement,  222 
Changchun-Kirin  Railroad, 

129 
Character,  Far  Eastern  mar- 
ket, 3 
Charter,  East  India  Company, 

made  perpetual,  226 
Chemical  industry,  Japan,  97 
Chemicals,    imports,    Ceylon, 
284 

India,  262 

Siam,  331 

Cheng-Tai  Railroad,  China,  129 
Cherries,  Japan,  93 
China,  area,  5 

—  attitude,  toward  foreign  in- 

tercourse, 15 

—  England's  entrance,  19 

—  first  invasion  by  Japan,  17 

—  incorporation  of  American 

Companies,   352 

—  opening,   16 

—  population,  5 

—  potentialities    and    aotnal- 

itiw,  9 


458 


INDEX 


INDEX 


459 


China- Japanese     Military 

Agreement,  1918,  49 
China  Trade  Act,  1921,  text, 

355 
China  wood  oil,  export  trade, 

75 
Chinaware,    manufacture, 

China,  84 
Chinese      Eastern      Railroad, 

China,  130 
Chinese  Empire,  end  of,  32 
Chinese  Government  railroads, 

130 
Chinese,  Imperial  Government, 

structure,  34 
Chinese    National    Assembly, 

1910,  36 
Chinese  private  railroads,  131 
Chinese  tariff,  64 
—  of  1918,  text,  368 
Chinese     treasury,     condition, 

126 
Chocolate    factories,     Ceylon, 

280 
Choshu  clan,  57 
Christian  Revolt,  1637,  Japan, 

29 
Chromite,  production  and  ex- 
ports, India,  253 
Chuchow-Pingsiang     Railroad, 

China,  130 
Chulalonkom,    King,    reform 

of,  320 
Cigars,  imports,  Ceylon,  284 

—  and     cigarettes,     imports, 

Singapore     trade     area, 

208 

Sumatra,    west    Coast, 

208 
China,  116 

—  —  Eastern       Archipelago, 

207 

—  manufacture,  China,  84 


Cinchona,  export,  Dutch  East 

Indies,  195 
Cinnamon,    exports,     Ceylon, 

280 
Cities     of    India,     principal, 

239 
Citronella  oil,  exports,  Ceyfcn, 

280 
Clarke,    Major    General    Sir 

Andrew,  294 
Climate,  Asia,  5 

—  Formosa,  106 
Clive,  Colonel,  227 

Coal,  imports,  Burma,  276 

Ceylon,  283 

China,  117 

Japan,  119 

Philippines,  201 

—  India,       production       and 

trade,  252 

—  production,  Dutch  East  In- 

dies,, 196 

—  production      and     export, 

China,  79 

Frencli  Indo-China,  313 

Japan,  93 

—  Saghalien,  110 
Coast-trade  duty,  65 
Cochin,  Portuguese  at,  221 
Cochin  China,  cession,  25 
Cocoa  and  chocolates,  imports, 

India,  266 
Coconuts,  production  and  ex- 
port, Ceykm,  279 

—  and  copra,  production  and 

export,   Siam,  327 

Malaya,  300 

Coconut    oil,    export,    Dutch 
East  Indies,  194 

—  India,      production      and 

trade,  249 

—  production,   French   Indo- 

China,  312 


Coconut  oil,  production  and 
export,  Philippines,  183 

Coffee,  India,  production  and 
trade,  243 

—  production      and      export, 

Dutch  East  Indies,  193 

Coffee     "culture,"     retention, 

Dutch  East  Indies,  170 
Colonial  trade  policies,  effect 

of  war  on,  10 
Colonization,    Korea,    failure, 

105 
Colonization    theories,    Dutch 

East  Indies,  154 
Commerce,  relation  of  history 

and  laws  to,  Asia,  8 
Commercial  code,  Japan,  70, 

409 
Commercial  treaties,  Japan,  66 
Compradore     system,     China, 

113 
Concession  areas,  foreign,  in 

China,  63 
Concession  lines  of  railroads, 

China,  130 
Concessions,      principal      un- 
developed in  China,  397 

—  railway,  in  China,  Ameri- 

can, 394 

British,  394 

French,  394 

German,  394 

Japanese,  394 

Russian,  394 

Condensed  milk,  imports,  In- 
dia, 266 

Malaya,  304 

Consortium,   new,   128 
Constitution,  Japanese,  54 
Contingent  system,  155 
Contracts,  Dutch  East  Indies, 

2n 


Coorg  Province,  area,  232 

—  population,  232 
Copper,  production,  Japan,  93 

—  production       and      trade, 

China,  80 
Copra,  export,  Ceylon,  279 

—  India,      production      and 

trade,  248 

—  production      and      export, 

Dutch  East  India,  194 

Philippines,  183 

Com,  production,  Philippines, 
180 

Corporations,  foreign,  in  Jap- 
an, 417 

Corrugated  sheets,  imports, 
India,  261 

Cotton,  export,  China,  77 

—  imports,    Japan,    119 

—  India,       production       and 

trade,  244 

—  production,  Japan,  90 
Siam,  327 

—  production     and     export, 

Burma,  270 

Korea,  102 

Cotton  cloth,  imports,  Philip- 
pines, 199 

—  production,  China,  77 
Cotton  goods,  imports,  Burma, 

274 

China,  114 

Siam,  330 

—  India,      production      and 

trade,  244 
Cotton    mill    machinery    im- 
ports, India,  261 
Cotton  mills,  China,  77 
Cotton   piece   goods,  imports, 
Ceylon,  282 

India,  259 

Cotton  spinning,  Japan,  95 
Cotton       textiles,       imports, 


460 


INDEX 


I  ■  J 


Ml 


Duteh  East  Indies,  205 

Eastern      Archipelago, 

207 

Singapore  trade  area, 

208 
Cotton  weaving,  Japan,  96 
Cotton  yam,  imports,  Eastern 
Archipelago,  207 

India,  250 

Philippines,  202 

Siam,  331 

—  production,  China,  77 
Cottonseed,  export,  China,  76 

—  production      and      trade, 

India,  248 
Cottonseed  oil,  exports,  China, 

75 
"Council  of  Defence,''  153 
Council  of  State,  Chinese,  41 
Courts,  character,  Dutch  East 

Indies,  211 

—  native,  Dutch  East  Indies, 

212 

Credit  advances  to  labor, 
Dutch  East  Indies,  168 

Credit  bondage,  168 

Credit  of  China,  127 

Credit  terms,  Dutch  East  In- 
dies, 208 

Crop  failure,  India,  236 

Culture  system,  160 

—  failure,  161 
Customs  pass,  66 

Cutch,  exports,  Burma,  272 


Daendals,   Governor   General, 

Dutch  East  Indies,  158 
Dairy   industry,   China,   78 
Dairying,  Japan,  93 
D'Andrade,  16 


I 


Decline  of  Portuguese  in  In- 
dia, 223 

Deforestration,  China,  79 

Delhi,  capital  of  India,  popu- 
lation, 240 

Density  of  population,  China, 
73 

—  Japan,  87 
Developments  under  American 

rule,  Philippines,  176 
Difficulties,       Far       Eastern 

trade,  3 
Discovery  of  Philippines,  143 
Doumer,    M.    Paul,    reforms, 

307 
Drugs,  imports,  India,  263 
Dutch,  arrival  in  Japan,  223 

—  influence,  in  Siam,  317 
Dutch  East  Indies,  area,  5 

—  decline  and  fall,  156 
' —  founding,  151 

—  method   of  trade  control, 

155 

—  policies,  154 

—  population,  5 

Dutch  Trading  Company,  160 
Dutch     Ventures     in     India, 

early,  151 
Dyes,  imports  Japan,  121 
Dyer  bill,  text,  355 
Dyestuffs  industry,  Japan,  97 


E 


Early  contracts,  India,  221 
Earthenware,        manufacture, 

China,  84 
East  India  Company,  chairter, 

225 

in  perpetuity,  226 

—  early  activities,  225 
5—  and  of  monopoly,  230 


INDEX 


461 


East  India  Company,  reorgani- 
zation, 228 

—  rights,  226 

Economic  interdependence  of 
Asiatic  countries,  7 

Education,  American  policy, 
in   Philippines,   176 

•—  Siam,  322 

Educational  system,  Japm,  30 

Effective  statutory  tariff  of 
Japan,  opposition  of  Eng- 
land, 69 

Eggs,  imports,  Philippines,  187 

—  production,  Japan,  92 

—  production     and     export, 

China,  78 
Elder  statesmen,  53 
Electrical  industry,  Japan,  95 
Electrical  machinery,  imports, 

India,  261 
Elgin,  Lord,  23 
Elliot,  Captain,  20 
Enameled   ironware,    imports, 

India,  264 

England,  entrance  into  China. 
18 

English  East  India  Company, 

arrival  in  India,  223 
Estate     products,     trade    in, 

Duteh  East  Indies,  197 
Estate   trade,    control,    Dutch 

East  Indies  205 
"Ever  Victorious  Army,"  25 
Exchange,  China,  113 
"Excise,"  (customs  tax),  66 
Executive  government,  French 

Indo-China,  308 

—  Siam  321 
Export  trade,  Burma,  268 

—  Ceylon,  278 

—  French  Indo-China,  314 
?—  Java  and  Madoera,  Dutch 

East  Indies,  191 


Export  trade,  Malaya,  303 
— -  Outer    possessions,    Dutch 
East  Indies.  191 

—  Siam,  330 
Exports,  India,  257 
Extraterritoriality,   China,    60 

—  Japan,  relinquishment,  30 


F 


"Faithful  Prince,"  24 
Far    Eastern    markets,    char- 
acter, 3 

Far    Eastern    trade,    difficult- 
ies, 3 

Farinaceous     foods,     imports, 

India,  265 
Faulkon,  Constantine,  317 
Fong,  Kwo-chang,  48 
Fertilizers,    imports,    Ceylon. 

283 
--  —  Dutch  East  Indies,  206 
Fibers,  imports,  Japan,  120 
Finances,  Japan,  31 
Financing  trade,  Japan,  118 
Firecrackers     and     fireworks, 

China,  84 
First  Opium  War,  21 
First   Philippine   Commission, 
172 

Fish,  imports,  China,  117 
Fisheries,  Formosa,  108 

—  India,  255 

—  Japan,  94 

—  Korea,  104 

—  Philippines,  187 

—  Saghalien,  109 

—  Siam,  328 

Flour,  imports,  Malaya,  304 

Philippines,  202 

Flour  milling,  Japan,  100 
Food  crops,  Philippines,  181 


462 


INDEX 


J  I 


Foodstuffs,     imports,     Dutch 

East  Indies,  207 

Japan,  121 

Malaya,  304 

Foreign       concession       areas, 

China,  63 
Foreign    intercourse,    attitude 

of  China  and  Japan,  15 
Forestry,  China,  79 

—  Philippines,  188 
Forests,  Formosa,  108 

—  Japan,  94 
— -  Korea,  104 

—  Saghalien,  109 
Free-trade      theories,      Dutch 

East  Indies,  154 
French  in  India,  227 
French  Indo-China,  area,  5 

—  population,  5 

Fruit  culture,  Japan,  93 
Fruits,   Philippines,  181 

—  production,  Korea,  102 
Fuel  oil,  imports,  India,  263 
Fuchun  collieries,  China,  79 


G 


Gas  industry,  Japan,  96 
Genro,  53 

Gentlemen^s  agreement,  68 
Ginseng,    production,    Korea, 

102 
Glass  industry,  Japan,  99 
Goa,  capture,  222 
Gold,  production,  Dutch  East 

Indies,  196 

India,  254 

Japan,  93 

Korea,  103 

Malaya,  303 

—  Saghalien,  110 
Gold  mining,  China,  81 


Gordon,  Major,  25 
Government,     British     India, 
232 

—  Dutch  East  Indies,  162 
evils  of,  165 

—  French   Indo-China,   early, 

306 

character,  307 

reorganization,    307 

—  Malaya,  295 

—  Straits  Settlements,  296 
Governor,  Dutch  East  Indies, 

power,  163 

Governor  General,  Philip- 
pines, power,  174 

Grass  cloth,  manufacture, 
China,  84 

Gray  piece  goods,  imports, 
China,  259 

Guilds,  China,  114 


Haberdashery,    imports,    Cey- 
lon, 284 
Han-Ge-Ping  iron  mines,  80 
Hardware,     imports,     Burma, 
275 

India,  264 

Harris,  Town  send,  29 
Harris  Treaty,  revision,   30 
"Heavenly  King,"  25 
Hemp,  export,  China,  78 

—  production,  Japan,  90 

—  production      and      export, 
Philippines,   181 

Hides,  and  skins,  India,  pro- 
duction and  trade,  250 

—  export,  Korea,  103 

—  imports,  Japan,  120 
History,    China,    during    for- 
eign intercourse,  15 


INDEX 


463 


History,    Japan,    during    for- 
eign intercourse,  15 

—  relation    to    Commerce    of 

Asia,  8 
Hongkong    Ordnances,    appli- 
cation, 358 

—  extracts  relating  to  foreign 

companies,  366 
Hong  merchants,  China,  112 
Hope,  Admiral,  24 
Horses,  number,  Japan,  91 
Korea,  103 

—  in  Philippines,  187 
Hosiery,  imports,  India,  259 
Hsu  Shih-chang,  49 

Huang  Hsing,  34 


Import  duties,  Dutch  East  In- 
dies, 209 
Import  trade,  Burma,  273 

—  Ceylon,  282 

—  French  Indo-China,  314 

—  Malaya,   303 

—  Philippines,   199 

—  Siam,  329 

Imports,     China,     decline    in 
volume,  117 

—  India,  257 

—  Java  and  Madoera,  Dutch 

East  Indies,  204 
Incorporation     of     American 

companies,  China,  352 
Incorporation       methods       in 

China,  353 
India,  castes,  239 

—  early  contacts,   1739,   221 

—  Persian  invasion,  1739,  228 

—  principal  cities,  239 

—  reforms  of,  1859,  231 

—  religion,  239 


India,  topography,  237 
India,  economics,  basis,  236 
Indigo,  India,  production  and 
trade,  252 

—  production,  Formosa,  107 
Indo-China- Yunnan    Railroad, 

China,  130 
Industrial  concessions  in 
China,  American,  397 

—  British,  397 

—  French,  397 

—  German,  397 

—  Japanese,  397 

—  international,  39 
Industries,  manufacturing,  in 

Philippines,  188 
Industry,  future,  Japan,  100 
Insurrections    against    Spain, 

148 
International    settlement, 

Shanghai,  residence  in,  62 

taxes  in,  62 

Invasion  of  China  by  Japan, 

17 
Iron  exports,  China,  80 
Iron  and  steel,  imports,  Dutch 

East  Indies,  206 

India,  260 

Philippines,  200 

Sumatra     East    Coast, 

206 

—  production,  India,  253 
Iron  ore,  imports,  Japan,  119 
Iron  pipe,  imports,  Japan,  120 
Ito,  Prince,  60,  66 


Jade,  exports,  Burma,  273 
Japan,   attitude   toward   for- 
eign intercourse,  16 
—  development,  30 


'  ■  I 


k   i 


■  I; 


464 


INDEX 


Japan,  first  inyasion  of  China. 
17 

—  opening,  15 

—  political  parties,  origin,  50 
Japanese     Constitution,     real 

character,  54 
Japanese  Diet,  51 
Japanese  Empire,  area,  5 

—  population,  5 

Japanese  imports,  develop- 
ment, 123 

Japanese  political  parties,  evo- 
lution, 54 

Japanese  trade  and  the  World 

War,  9 
Java     and     Madoera,     trade 

areas,  190 
Joena,  Philippme  patriot,  149 
Judicial  functions,  Philippine 

Government,  175 
Judicial   system,   Dutch   East 

Indies,  210 

—  French  Indo-China,  308 

—  Japan,  71 

—  Malaya,  295 

—  Siam,  321 
Judiciary,  Japanese,  54 
Jute,  export,  China,  78 

—  India,      production      and 

trade,  243 
Jute  foods,  imports,  Burma, 

275 
Jute  mill  machinery,  imports, 

India,  261 


'^ 


Kachang  oil,  imports,  Malaya, 

304 
Kailan  mines,  China,  79 
Kapok,  Dutch  East  Indies,  195 


Kapok,    production    and    •■:- 

ports,  Philippines,  18(5 
Kedeh,  King  of,  292 
Kerosene,  imports,  China,  117 

Eastern  Archipelago,  207 

India,  263 

Japan,  122 

Siam,  331 

Kiaoehow,  lease,  27 

Kiukiang-Nanchang  Railroad, 
China,  131 

Kokuminto  party,  57 
Kwangchow,  lease,  27 
Kwo-Ming    party,    expulsion, 
40 


Labor,    credit    advances    to, 

Dutch  East  Indies,  168 
Lac-stick,  export,  Burma,  273 
Lacquer   wares,    manufacture, 
Japan,  99 

Lamps,  metal,  imports,  India, 

264 
Lancaster,  Admiral,  225 
Land  tenure,  Dutch  East  In- 
dies, problems,  169 

—  Japan,  by  foreigners,  72 
"Landroads,"  Dutch  East  In- 
dies, 211 

Languages,  Asia,  6 
Lansing-Ishii  agreement,  48 
Lauan  trees,  Philippines,  188 
Law,     administration,     Dutch 
East  Indies,  210 

—  Japanese  commercial  code, 

409 
Laws,    relation    of   commerce 
of  Asia,  8 


^: 


>  < 


INDEX 


465 


L«ad,  exports,  Burma,  272 

China,  82 

—  imports,  Japan,  121 

Leaf  indigo,  production, 
Japan,  90 

Leaf  tobacco,  production, 
Japan,  90 

Leather,  imports,  China,  117 

Philippines,  203 

Leather  goods,  manufacture, 
China,  85 

Legal  requirements^  foreign 
corporations  in  Japan,  421 

Legaspi,  in  Philippines,  144 

Legislative  functions,  Philip- 
pine government,  175 

Lemon-grass  oil,  exports, 
Ceylon,  280 

Light,  Francis,  292 

Id  Hung-chang,  23 

Likin,  66 

Limestone,  Saghalien,  110 

Linseed,  India,  production 
and  trade,  248 

Linseed  oil,  export,  China,  75 

India,  250 

Liquors^  imports,  India,  263 

Li  Yuan-hung,  40 

Loans,  domestic,  China,  406 

^  foreign,  China,  402 

Local  self-government,  Mala- 
ya, 296 

London,  merchants,  early  ad- 
ventures. 224 

Lubricating  oil,  imports,  In- 
dia, 263 

Lunghai  Raifroad,  China,  129 

M 

Macaroni  manufacture,  China, 
84 


Macartney,  Lord,  19 
Machinery,    imports,    Burma, 
276 

Ceylon,  284 

Dutch  East  Indiea,  206 

India,  261 

Japan,  122 

Philippines,  200 

Sumatra    East    Coast, 

208 

—  manufacture,  Japan,  97 

—  and  tools,  imports,  Suma- 

tra West  Coast,  208 
Madras,  population  and  port, 

239 
Madras  Province,  area,  232 

—  population,  232 
Magellan  in  Philippines,  144 
Mahratta  wars,  230 

Maize,  India,  export,  241 
Malaya,  area,  5 

—  population,  5 

Manchu  Emperor  K*ang-hi,  13 

Manchurian  railroads,  con- 
tracted for,  132 

Manchus,  fall,  28 

Manila,  occupation  by  Eng- 
Hsh,  147 

Manufactured  foods,  imports, 
Japan,  122 

Manufacturing,  Formosa,  109 

Manufacturing  industries,  Ko- 
rea, 104 

Maritime  customs,  administra- 
tion, Chinese,  65 

Market,  character  of  Indian, 
267 

Markets,  Indian,  chief  sup- 
pliers, 258 

Marks,  merchandise,  India,  421 

Match  industry,  Japan,  99 

Matches,  imports,  Siam,  331 


I 


466 


INDEX 


INDEX 


Mats,  manufacture,  China,  85 
Meat  and  diary  products,  im- 
ports, Philippines,  203 
Meddleton,  Captain,  voyage  of. 
226 

Merchaodise    Marks    Manual, 

India,  421 
Merchandising       methods, 

French  Indo-China,  345 
Merchant  marine,  Japan,  30 
Metal  imports,  Malaya,  304 
Metal  lamps,   imports,  India, 
264 

Metals,  imports,  Burma,  275 

Ceylon,  283 

China,  115 

Mexico,  supervision,  over  Phil- 
ippines, 147 

Mica,  production  and  export, 
India,  253 

Michelboume,  Sir  Edward. 
226 

Milk,  condensed,  imports,  Phil- 
ippines, 203 

Millet,  India,  export,  241 

—  production,  Japan,  89 

Korea,  102 

Mineral  oil  imports,  India,  263 
Minerals,  Formosa,  109 

—  imports,  China,  115 

—  India,      production      and 

trade,  252 
Ming  dynasty,  fall,  18 

Mining  laws,  China,  operation. 
80 

Minto,  Lord,  231 

Missionaries,  banishment  of, 
by  Japan,  28 

Mixed  court,  China,  61 

Modem  government,  Philip- 
pines, 171 


467 


Modem   policies,   Philippines, 
171  ' 

Mongkut,  King,  319 
Monopoly,    East    India   Com- 
pany, weakening,  229 
Moors  in  India,  221 
Motor  cars,  imports,   Ceylon. 

284  r         i  J     u, 

India,  266 

Motor  cycles,  imports,  India, 
266 

Motor  tracks,  imports,  India, 
266 

Munitions,  imports,  China,  117 
Mustard  seed,  India,  produc- 
tion and  trade,  248 


Nanking,  Treaty  of,  1842,  22 

Nanking  Assembly,  dissolution. 
40  ' 

Napier,  Lord,  20 

National  debt,  Chinese,  401 

Native  customs,  administra- 
tion, Chinese,  66 

Native  States  of  India,  area. 
233  ' 

—  population,  233 
"Net-profit  system,**  170 
New    Company    (East    India 

Company),  227 

—  factories,  227 
New  Consortium,  128 
Nicobais,  Andamans  and,  Prov- 
ince, area,  232 

population,  232 

Northwest  Provinces,  area,  232 

—  population,  232 
Numo  do  Cunha,  222 


Octroi  tax,  66 

Oil,  imports,  Philippines,  202 

Oil  cake,  imports,  Japan,  119 

Oil  seeds,  India,  production 
and  trade,  247 

Okuma,  Count,  56 

"Open-door*'  policy,  27 

Opening  of  Japan,  29 

Opening  of  Japan  and  China, 
15 

Opium,  imports,  Malaya,  304 

Siam,  330 

—  India,  exports,  252 

Ore,  manganese,  production 
and  exports,  India,  253 

Oriental  backwardness,  causes, 
2 

Oriental  Development  Com- 
pany, Korea,  103 

Orissa,  Bihar  and,  Province, 
area,  232 

population,  232 

Ormus,  King  of,  222 

Oudh,  Agra  and,  United  Prov- 
inces, area,  232 

population,  232 

Outer  Possessions,  Dutch  East 
Indies,  trade  areas,  191 


Pacific  Commercial  Company, 

199 
Paper,  imports,  China,  117 

India,  264 

Japan,  122 

— ^.manufacture,  China,  83 
Japan,  97 

—  production,  India,  265 

—  ream,  imports,  Ceylon,  284 


Paper  goods,  imports,  Philip- 
pines, 203 

Paper  pulp,  imports,  Japan, 
121 

"Particular**  lands,  Dutch  East 
Indies,  169 

Pasteboard,  imports,  India, 
264 

Pastoral  industry,  Formosa, 
107 

Patent  ^aws,  Japan,  71 

Patent  medicine,  India,  263 

Peanut  oil,  export  trade, 
China,  75 

Peanuts,  export,  China,  75 

—  India,      production       and 

trade,  248 

Peas,  production,  French  Indo- 
China,  313 

Japan,  89 

Peking-Hankow  Railroad, 
China,  129 

Peking-Mukden  Railroad, 
China,  129 

Peking-Suiyuan  Railroad, 
China,  130 

Penang,  founding,  292 

Penshihu  iron  mine,  80 

Pepper,  export,  Dutch  East 
Indies,  195 

—  production      and     export, 

Siam,  327 
Perry,  Admiral,  15 
Persian  invasion  of  India,  17- 

39,228 
Persimmons,  Japan,  93 
Petroleum,  China,  82 

—  imports,  Ceylon,  283 

—  Japan,  93 

—  production,  Dutch  East  In- 

dies, 196 


468 


INDEX 


INDEX 


469 


1' 


(  ' 


Petroleum,  production  and  ex- 
port, Burma,  269 

Philip  II  of  Spain,  monopoly 
to  Portuguese  East  India 
Company,  223 

Philippines,  area,  5 

—  population,  5 

during     sixteenth     cen- 
tury, 145 

during  seventeenth  cen- 
tury, 146 

Pig  iron,  imports,  Japan,  120 

Plumbago,  production  and  ex- 
port, Ceylon,  28 

Plums,  Japan,  93 

Political  divisions,  India,  232 

Political  parties,  Chinese,  43 

—  Japan,   evolution,  54 

origin,  50 

Population,      Ajmer-Merwara, 

232 

—  Andamans    and    Nicobais, 

232 

—  Asia,  5 

—  Assam,  232 

—  Baluchistan' Province,  232 

—  Bengal  Province,  232 

—  Berar  Province,  232 

—  Bihar  and  Orissa  Province, 

232 

—  Bombay  Province,  232 

—  British  India,  5 

—  Burma,  5 

—  Burma  Province,  232 

—  China,  5 

—  Coorg,  232 

—  Dutch  East  Indies,  5 
density,  190 

—  Formosa,  106 

—  French  Indo-China,  5 

—  Japanese  Empire,  5 


Population,   Korea,  101 

—  Madras  Province,  232 

—  Malaya,  5 

—  Northwest  Province,  232 

—  Philippines,  5 

—  Punjab  Province,  232 

—  Saghalien,  109 

—  Siam,  5 

—  United     Provinces,     Agra 

and  Oudh,  232 
Port  Arthur,  lease,  27 
Portsmouth,  Peace  of,  28 
Portuguese    Conciliation    with 

England,  224 
Portuguese  East  India  Com- 
pany,   monopoly    of    India 
trade,  223 
Potatoes,    sweet,    production, 
Japan,  89 

—  white,   production,   Japan, 

89 
Potentialities    and   actualities, 

of  China,  9 
Pottery  industry,  Japan,  99 
Pottery    manufacture,    China, 

84 
Poultry,  number,  Korea,   103 
—  Philippines,  187 
Poultry,  farming,  Japan,  92 
Presidential      Election      Law, 

1914,  41 
Proprietary  medicines,  China, 

83 
Provinces  of  India,  232 
Provincial  administration, 

Dutch  East  Indies,  164 
Provincial      officials,      China, 

duties,  37 

Provisional  Constitution,  1914, 
41 


Provisional  President,  election 

of  Yuan  Shi-kai,  39 
Provisions,    imports,    Burma, 

276 

India,  265 

Pulp,  imports,  India,  265 
Pulse,  India,  export,  241 
Punjab  Province,  area,  232 
—  population,  232 

Quicksilver  mines,  China,  81 
Quinine,   export,   Dutch  East 
Indies,  195 


Races,  Asia,  6 

Raffles,  Sir  Stamford,  reforms, 

159 
Raffles,  Thomas  Stamford,  293 
Railroad,  first,  China,  26 
Railroad  development,  China, 

128 
—  French  Indo-China,  309 
Railroads,  Siam,  322 
Railroads  contracted  for, 

China,  31 
Railway  concessions  in  China 

American,   394 

—  British,  394 
—•  French,  394 

—  Qerman,  394 

—  Japanese,  394 

—  Russian,  394 

Railway  materials,  imports,  In- 
dia, 266 

—  —  Sumatra  East  Coast,  208 


Ramie,  export,  China,  78 
Rape,  India,  production  and 

trade,  248 
Rape  seeds,  export,  China,  75 

—  production,  Japan,  90 
Raw  materials,  imports,  Japan, 

119 

Malaya,  304 

Rawhides,  export,  China,  79 

—  India,  production,  252 

—  and  skins,  exports,  Burma, 

271 
Raw-skin,    India,    production 

and  trade,  250 
Red  beans,  production,  Korea, 

102 
Reform  edicts,  1898,  27 
Reforms,   attempted   in   1803, 

Dutch  East  Indies,  158 

—  of  1859,  India,  231 
"Regular*'    customs,    Chinese, 

66 
Religion  of  India,  239 
Reorganization  loan,  39 
^Resident,"  creation  of  post  of, 

293 
Restoration  of  Dutch  rule,  160 
Restoration    Movement,    1915, 

44 
Revolt  of  South  China,  1917, 

47 
Revolution,  causes,  32 

—  Chinese,  1911,  28 
Ricci,  Father,  17 

Rice,  consumption  and  import, 
Japan,  88 

—  cultivation,  Ceylon,  281 

—  imports,  Ceylon,  282 
China,  117 


470 


INDEX 


t  I 


i 


Rice,  consumption  and  import, 
Eastern  Archipelago,  207 

—  —  Japan,  121 

Philippines,  201 

Singapore    trade    area, 

208 

Sumatra    East     Coast, 

208 

—  India,      production      and 

trade,  241 

—  production,  Formosa,  106 

—  production     and      export, 

Burma,  268 

—  production      and      export, 

Dutch  East  Indies,  195 

French  Indo-China,  311 

Korea,  102 

Siam,  324 

—  production     and     import, 

Philippines,    179 

^--  production  and  trade, 
China,  75 

Rizal,  Dr.  Jose,  149 

Rochelle  Petroleum  Company, 
197 

Rosin,  production,  India,  255 

Royal  Dutch  Petroleum  Com- 
pany, 197 

Rubber,  exports,  Dutch  East 
Indies,  193 

India,  255 

—  imports,  Ceylon,  283 
Japan,  119 

—  production,  French  Indo- 

China,  312 

—  production     and     export, 

Burma,  271 

Ceylon,  279 

•—  —  Malaya,  299 

Siam,  327 

Rubies,    production    and   ex- 


port, Burma,  273 

Russo-Japanese    War,    1904- 
1905, 27 


S 


Sabai,  use,  India,  265 

Sago  flour  imports,  India,  266 

Salt,  imports,  India,  265 

—  Korea,  104 

Salt  wells,  China,  82 
Saltpeter,  imports,  Japan,  120 

—  production  and  export,  In- 

dia, 254 
Sapphires,  Siam,  328 
Seiyua-kai  party,  57 
Semi-manufactured  goods,  im- 
ports, Japan,  120 
"Separate  traders,"  226 
Sepoy  mutiny,  231 
Sesame  seed,  export,  China,  75 

—  India,       production       and 

trade,  249 
Sesamum,    production,    Siam, 

327 
Seymour,  Admiral,  23 
Shanghai  -  Hangchow  -  Ningpo 

Railroad,  China,  129 
Shanghai-Nanking     Railroad, 

China,  129 
Shantung  coal  mines,  79 
Shantung  Railroad,  China,  130 
Sheep,  number,  Japan,  92 
Sheet   tin,    imports,    Sumatra 
East  Coast,  208 

Sumatra    West    Coast, 

208 
Shellac,  export,  Burma,  273 
India,  254 


i  I  f 


INDEX  471 

Shimonoseki,  bombardment,  30   I   Soya   beans,   production   and 


Shipbuilding,  Japan,  96 

Shipingkai-Liaoyun  Railroad, 
China,  129 

Shogun,  retirement  of  Japan- 
ese, 30 

Siam,  area,  5 

—  population,  5 

Silk,  culture,  Korea,  103 

—  export  trade,  China,  74 

—  imports,  India,  262 

—  India,      production      and 

trade,  245 

—  production  and  export,  Ja- 

pan, 90 
Silk   goods,   imports,   Burma, 
275 

Silk    manufactures,    imports, 

India,  262 
Silk    piece    goods,    imports, 

Siam,  331 
Silk  weaving,  Japan,  96 
Silk  yam,  imports,  India,  262 
Silver,  fluctuation,  India,  258 

—  production    of   the    world, 

346 

—  production      and      export, 

Burma,  271 
Silver  mines,  China,  81 
Silver  rates,  fluctuations,  348 
Silver  situation.  Far  Eastern, 

343 
Singapore,  establishment,  292 
Sino-Japanese      War,     1894r- 

1895,  26 
Skins,  undressed,  export,  Chi- 
na, 79 
South    Manchurian    Railroad, 
China,  130 

Soya  beans,  production,  Japan, 
89 


export,  Korea,  102 
Soya  bean   cake,  export  and 

trade,  China,  75 
Soya    bean    oil,    export    and 

trade,  China,  74 
Spanish   rule   in  Philippines, 

148 
Spices,   imports,   Burma,  276 

—  India,      production      and 

trade,  243 

Spindles,  China,  77 

Statutory  tariff,  Japanese,  68 

Steel  bars  and  channels,  im- 
ports, India,  260 

Straw-braid  industry,  China, 
83 

Sugar,  imports,  Ceylon,  283 

China,  116 

India,  260 

Japan,  121 

—  India,  production  and  trade, 

242 

—  production,  Formosa,  106 
French  Indo-China,  313 

—  production      and      export, 

Dutch  East  Indies,  192 

Philippines,  184 

Sugar    centrals,    number    and 
locations,  Dutch  East  Indies, 
193 
Sugar  refining,  Japan,  99 
Sulphate    of    ammonia,    im- 
ports, Japan,  119 
Sun,  Yat-sen,  34 
Sunning  Railroad,  China,  131 
Surat,  "factory"  at,  226 
Suspension  of  Boxer  Indem- 
nity, 49 
Swatow-Chaochowfu  Railroad, 
China,  131 


ikftz   ^.,- 


< 


IH 


1 


472 


INDEX 


Sweet    potatoes,    Philippines, 
181 

—  production,  Formosa,  107 
Swine,  imports,  Malaya,  304 
— ^number,  Korea,  103 

—  Philippines,  187 


Taiping  Rebellion,  22 

Taku  forts,  expedition  against, 
23 

Tanneries,  India,  251 

Taokow-Chinghua  Railroad, 
China,  129 

Tapioca,  export  of  Dutch 
East  Indies,  195 

Tariff,  Chinese,  64 

Tariff  changes,  Japanese,  ef- 
feet  on  industry,  68 

Tariff  reform,  Japanese,  ef- 
fect on  revenues,  69 

Taro  root,  Philippines,  181 

Tata  Iron  and  Steel  Works, 
253 

Taych  Iron  and  Coal  Com- 
pany, 80 

Tea,  consumption  and  export, 
China,  76 

■ —  India,  production  and 
trade,  243 

—  production,  Formosa,  107 

—  production      and      export, 

Ceylon,  278 

Dutch  East  Indies,  193 

Japan,  91 

Teakwood,  export,  Siam,  328 

—  production      and      export, 

Burma,  270 
Tents,  imports,  India,  259 
Textiles,  cotton,  imports,  East- 
ern Archipelago,  207 


Textiles,  cotton,  imports, 
Singapore,  208 

Sumatra  East  Coast, 

208 

—  imports,  Malaya,  304 
Sumatra    West    Coast, 

208 

—  wool    and    silk,    imports, 

Eastern  Archipelago,  207 

Tientsin-Pukow  Railroad, 
China,  129 

Timber,  production  and  ex- 
port, Burma,  270 

Tin,  production,  French  Indo- 
China,  314 

Siam,  328 

—  production     and     export, 

Burma,  273 

Dutch  East  Indies,  196 

Tin  mines,  China,  82 

Tin  mining,  production  and  ex- 
port, Malaya,  301 

Tin  plates,  imports,  India,  261 

Tires,  automobile,  imports,  In- 
dia, 267 

Tobacco,  exports,  Burma,  272 

Dutch  East  Indies,  194 

—  imports,  Burma,  276 

Malaya,  304 

Siam,  331 

—  production,  China,  77 

French  Indo-China,  313 

Siam,  326 

—  production      and     export, 

Ceylon,  280 

Philippines,  185 

Topography  of  Japan,  86 
Total  imports,  Outer  Posses- 
sions, Dutch  East  Indies,  207 
Tractors,  imports,  Philippines, 
200 


INDEX 


473 


Trade  areas,  China,  73 
—  Dutch  East  Indies,  190 
Trade  balance,  India,  257 
Trade    control,    Dutch    East 

Indies,  157 
Trade-mark  Laws,  Dutch  East 

Indies,  209 

Trade-mark  regulations,  Ja- 
pan, 71 

Transit  dues,  65 

Treaty,  first  Japanese,  with 
Harris,  29 

Treaty  of  1821,  Great  Britain 
and  Siam,  318 

—  of  1855,  Great  Britain  and 

Siam,  319 

—  of  1909,  Great  Britain  and 

Siam,  320 
Treaty  ports,  63 
Tribes  in  Philippines,  179 
Tropical  Colonial  government, 

166 
Tuan  Chi-jui,  48 
Tungsten,  production,  French 

Indo-China,  314 

—  production      and      export, 

Burma,  271 

Tungsten  ore,  China,  82 

Turpentine,  production,  India, 
255 

"Twenty-one  Demands,"  46 


U 


United   Provinces,   Agra   and 

Oudh,  area,  232 

population,  232 

tJngalvanized,  imports,  India, 
261 


Varnishes,  manufacture,  Chins, 
85 

Vasco  da  Gama,  221 
Vegetable  oils,   French   Indo- 
China,  312 

—  India  trade,  249 

—  manufacture,  Japan,  100 
Vegetable  wax,  export,  China, 

78 
Vegetables,  export,  China,  78 

—  production,  Korea,  102 
Vermicelli,    manufacture, 

China,  84 
V^illage  economics,  India,  236 


W 

Ward,  death,  25 

Wearing      apparel,      imports, 

Dutch  East  Indies,  201 
Weiheiwai,  lease,  27 
Western  influence,  opposition 

to,  and  decline,  in  China,  18 
Wheat,  export,  China,  77 

—  India,  production  and  trade, 

240 

—  production,  Japan,  88 
Korea,   102 

White  wax,  export,  China,  78 
Wolfram  ore,  production  and 

export,  India,  254 
Wool,  export,  China,  79 
-—  imports,  Japan,  119 
Wool  and  carpets,  India,  pro- 
duction and  trade.  251 
Wool  and  silk  textiles,  imports. 
Eastern  Archipelago,  207 


474 


INDEX 


Woolen  goodsy  imports,  Japan, 
122 

Woolen  manufactures,  Japan, 
96 

Writing  paper,  imports,  India, 
264 

Wu  Ting-fang,  Dr.,  34 


Y 


Xavier,  Francis,  17 


Yacal  trees,  Philippines,  188 
Yeh,  Governor  of  Canton,  23 
Yuan  Shi-kai,  34 
—  death  of,  47 

Z 

Zinc,  production,  French  Indo- 
China,  313 

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